Sleep Number Corporation · NASDAQ:SNBR
Sleep Number — Select Comfort — Shareholder Meeting (May 2008)
42 slides from Sleep Number's shareholder meeting presentation, May 14, 2008
Slide 1: Path Forward – Annual Meeting of Shareholders
“Path Forward” Annual Meeting of Shareholders
Slide 2: Mark Kimball, General Counsel
Mark Kimball General Counsel
Slide 3: Introductions
Introductions Board of Directors Senior Management KPMG The Carideo Group/Broadridge
Slide 4: Meeting Agenda
Meeting Agenda Present Matters for Shareholder Vote Voting Adjourn Formal Portion of the Meeting Management Presentations Q & A Vote Results
Slide 5: Shareholder Business
Shareholder Business Election of Directors § Christopher P. Kirchen § Brenda J. Lauderback § Michael A. Peel § Jean-Michel Valette Approval of Selection of KPMG as Independent Auditors
Slide 6: Forward-looking statements
Statements used in this presentation that relate to future plans, events, financial results or performance are forward-looking statements that are subject to certain risks and uncertainties including, among others, such factors as general and industry economic trends; uncertainties arising from glob
Slide 7: Path Forward – Bill McLaughlin, CEO
“Path Forward” Bill McLaughlin Chief Executive Officer
Slide 8: Agenda
Agenda Perspective Plan and Actions Path Forward § Brand Development § Customer Experience Q & A
Slide 9: Leader in affordable luxury sleep products and innovation
Leader in affordable luxury sleep products and innovation Vision: Strategy: Awareness People & Systems Distribution Innovation Excellence & Leverage Destination
Slide 10: Journey
($ in millions) ($ in millions) Journey
Slide 11: Recent Challenge - External & Internal
Recent Challenge - External & Internal 2007-08 Development Senior Leadership § Sales § Marketing Product Development Store Design Brand & Media Development
Slide 12: Stabilization/Recovery Plan
Stabilization/Recovery Plan Preserve Cash Rightsize Costs (preserve, strengthen advantages) Disciplined Growth
Slide 13: Cash Management
($ in millions) * Please refer to slide 42 of this presentation for a definition of “Free Cash Flow” which is a non-GAAP financial measure. * Q1 Cash Management
Slide 14: Cost & Margin – $45 Million Annual Impact
$45 Million Annual Impact Cost & Margin Headcount and Overhead -20% § HQ § Plants § Sales Price and Discounts
Slide 15: Disciplined Growth
Disciplined Growth Product innovation § Beds § Accessories Marketing Sales leadership and process
Slide 16: Journey remains challenging; but worthwhile
Journey remains challenging; but worthwhile Known Product Owner Endorsement Business Model People Agenda Unknown Economy Financial Markets Commodity Costs
Slide 17: Aware, Consider, Attract, Close, Experience
Aware Consider Attract Close C. Hall S. Ibach Experience Countering Recession
Slide 18: Cathy Hall, Chief Marketing Officer
Cathy Hall Chief Marketing Officer
Slide 19: Retail Awareness
Retail Awareness Source: Brand Tracker (Unaided) Total Unaided Awareness October Sleep Number/Select Comfort Net 4% Marketing Objectives :
Slide 20: Marketing Strategies
Strategies : 1. Target active mattress shoppers and those motivated and capable of purchasing in a difficult economy 2. Increase efficiency by integrating campaign across all channels 3. Leverage unique product benefit: personalized comfort
Slide 21: Broad Reach and Direct Response
Broad Reach :30 TV engages consumer attention; drives awareness and consideration Direct Response :60s and :120s, direct response print, and digital deliver the depth of product information consumers seek for what is a considered purchase Aware Consider 1. Strategy : Target active mattress shoppers
Slide 22: Increase efficiency by integrating campaign across channels
2. Strategy : Increase efficiency by integrating campaign across all channels Retail, Direct and E-Commerce Align media spend to reach more target consumers and to provide motivation to learn more
Slide 23: Purchase Consideration
Purchase Consideration Source: Purchase Process Study; Quantitative Concept Research 3. Strategy : Leverage unique product benefit: personalized comfort Quality Comfort Provides Good Support Good for Your Back Price Durability/Long-lasting Most important purchase consideration Other considerations C
Slide 24: Leverage unique product benefit: personalized comfort
3. Strategy : Leverage unique product benefit: personalized comfort New brand campaign levers product’s unique point of difference and acknowledges macroeconomic environment § Consumer Insight : The tougher your day, the more you deserve a Sleep Number night § Main Message : The most comfortable sle
Slide 25: Creative Research
Source: Quantitative Creative Research Personalized comfort comes through loud and clear, as does store awareness Key attributes Top 2 Box Agreement (% Strongly/Very Strongly Agree) Adjust to my own level of firmness 3-spot av. 91% Are available at Sleep Number stores 85% Are unlike any other mattre
Slide 26: Initial in-market results are in line with expectations
Initial in-market results are in line with our expectations Markets with dedicated campaign elements consistently outperforming balance of chain Still very early in the campaign. Expect to build on results over time Will communicate more after Q2
Slide 27: Shelly Ibach, SVP US Sales
Shelly Ibach Senior Vice President US Sales
Slide 28: Consumer Experience
Aware Consider Attract Experience Close Consumer Experience
Slide 29: Multiple Channels
Multiple Channels Team Leadership Changes Mission Driven Attract Experience Close Consumer Centric Proven Model Promotions Store Design Bedding accessories
Slide 30: Building on Proven Model: multi-channel approach
Attract Experience Close Building on Proven Model: Leveraging multi-channel approach to optimizing our investment and store count Stores, E-Comm and Direct § Convenience § Experience / Product knowledge Select Comfort Sales Force § Sleep Expertise § Direct to consumer, immediate product feedback Sup
Slide 31: Promotions: Leverage Market Share Periods
Attract Experience Close Promotions: Leverage Market Share Periods Drive traffic with urgent, value orientated message Profitable Growth Example: Sleep Number Special Edition Bed for the Memorial Day Event § Queen set price $1399, comparable value $1899 § While supplies last Multiple Channels
Slide 32: New store design
Attract Experience Close Consumer Centric New store design: Attracts, engages, orients and inspires
Slide 33: Experience: About both the product and the service
Attract Experience Close Consumer Centric Experience: About both the product and the service
Slide 34: Re-brand to Sleep Number
Attract Experience Close Consumer Centric Re-brand to Sleep Number ® : Eliminate brand confusion; optimize investments in raising awareness for Sleep Number brand
Slide 35: Bedding Accessories: Accelerate Profitable Growth
Attract Experience Close Enhance consumer experience Lead industry in innovation Bedding Accessories: Accelerate Profitable Growth Consumer Centric
Slide 36: High-performance Teams
Attract Experience Close Team High-performance Teams: Drive profitable growth Leadership changes Leadership development Selling process - skill development Lead management best practices Excellence in execution
Slide 37: Mission Driven
Attract Experience Close Team - - Mission Driven To improve people’s lives by improving their sleep
Slide 38: Bill McLaughlin, Chief Executive Officer
Bill McLaughlin Chief Executive Officer
Slide 39: Summary
Summary Clear “Path Forward” Have a plan and are executing Know you have our full commitment Thank you for your support
Slide 40: Q & A
Q & A
Slide 41: Shareholder Business – Vote Results
Shareholder Business Vote Results
Slide 42: Non-GAAP Financial Measures
Non-GAAP Financial Measures Slide 13 of this presentation refers to "free cash flow" which is a non-GAAP financial measure. This measure should not be considered in isolation, or a substitute for, the corresponding GAAP measure. This measure as calculated by the company, may not be comparable to sim