Sleep Number Corporation · NASDAQ:SNBR
Sleep Number — Select Comfort — Q1 2008 Earnings Presentation
11 slides from Sleep Number's earnings presentation, Apr 24, 2008
Slide 1: Select Comfort First Quarter 2008 Investor Call
Select Comfort First Quarter 2008 Investor Call April 23, 2008
Slide 2: Forward Looking Statements
Statements used in this press release 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 glo
Slide 3: FY08 First Quarter Results Summary
FY08 First Quarter Results Summary Q1 Q1 2008 2007 Change Net Sales 168.2 $ 216.5 $ (48.3) $ Gross Profit 96.9 $ 134.2 $ (37.3) $ Operating (loss) income (11.0) $ 16.8 $ (27.8) $ Net (loss) income per share (0.16) $ 0.21 $ (0.37) $ Diluted Shares (millions) 44.1 51.8 (7.7) ($ in millions, except EPS
Slide 4: Combination of External and Company-Specific Q1 Events
Combination of External and Company-Specific Q1 Events Macro - existing home sales down 23% Media investment reduced 23% vs. PY Product mix lowered sales by $6M Wholesale timing lowered sales by $7M QVC Retail Partners Factors Affecting First Quarter Revenue (3%) (3%) (5%) (22%) (2%) (25%) (20%) (15
Slide 5: Actions in Face of Difficult Environment
Actions in Face of Difficult Environment 2008 Impact Cost and Margin $30M Staffing: Corporate, sales & operations L owered promotions, price increase Cash, Inventory and Payables Management $8M - $15M Deferral of programs: International, SAP & Stores Stabilize / Restore Sales Restore media investmen
Slide 6: Enhanced Marketing
Enhanced Marketing select @ comfort Y Strengths Research + Sleep Number + Personalized Comfort Y Opportunities * Brand confusion + Only couples? + Where to find? + How does it work? Strategic Approach Y Integrated Multi-Channel Retailer + Stores and online Y Leverage Sleep Number difference + "Contr
Slide 7: Channel Performance and Store Summary
Channel Performance and Store Summary Q1 Channel Sales Store Summary Stores with New Fitch Design by Quarter 2 8 9 14 24 41 53 58 Total Store Count Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08(E) Q3-08(E) Q4-08(E)
Slide 8: Q1 Net Operating Results Roadmap
Q1 Net Operating Results Roadmap ($ in millions)
Slide 9: Cash Generation Remains Strong
Cash Generation Remains Strong ($ in millions) Operating Cash Flow of $14.6M
Slide 10: Targeting Return to Profitability in Q3
Targeting Return to Profitability in Q3 Operating Profit Benefit of $10M+ Q1 and Q3 historically similar: Planned Q3 Improvements Cost Reductions $4M -$5M Corporate, selling, staffing reductions Flat store count Lower consumer financing costs (lower interest rates) Q1 severance Gross Margin Enhancem
Slide 11: Summary
Summary Opportunity unchanged + Need for sleep increasing + Unique product — appreciated by customers * Business model advantaged * Team with passion for product and customers » Actions taken to improve performance Slide 11