Slide 1: Second Quarter 2008 Investor Call
Select Comfort Second Quarter 2008 Investor Call July 23, 2008
Slide 2: Forward Looking Statements
Statements 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 global ev
Slide 3: FY08 Second Quarter Results Summary
FY08 Second Quarter Results Summary Q2 Q2 2008 2007 Change Net Sales 152.1 $ 179.0 $ (26.9) $ Gross Profit 90.6 $ 109.5 $ (18.9) $ % of Net Sales 59.6% 61.2% Operating (loss) income (10.3) $ 4.8 $ (15.1) $ Net (loss) income per share (0.15) $ 0.06 $ (0.21) $ Diluted Shares (millions) 44.1 49.9 (5.8)
Slide 4: Realizing the Benefits of Q1 Initiatives
Cost Reduction and Margin Improvement Cash, Inventory and Payables Stabilize / Restore Sales $30M $8M-$15M Reduce workforce: corporate, sales & operations Lower promotions, price increase Defer programs: International, SAP & Stores Restore media investment Introduce new product (6000 model) Launch m
Slide 5: Actions to Support Second Half
Cost and Profit Enhancement Initiatives: Revenue Support: Actions to Support Second Half Impact • Productivity / Discretionary Spend Reductions $3.0 M • Pricing $3.0 M • 10 additional store closures • Media and Marketing • Adjust creative ad mix • Flex with performance • New Bed Model • Premium pric
Slide 6: Second quarter results reflect the impact of management actions taken at the end of the first quarter
Second quarter results reflect the impact of management actions taken at the end of the first quarter Improved Performance on Lower Seasonal Sales Q2 Q1 2008 2008 Improvement Net Sales $ 152.1 $ 168.2 Net Sales Change vs. Prior Year (15%) (22%) + 7 ppt Gross Profit Rate 59.6% 57.6% + 200 bp Operatin
Slide 7: Second-Half Outlook and Store Summary
Second-Half Outlook and Store Summary Stores with New Fitch Design by Quarter 2 8 9 14 24 40 52 53 Store Count by Quarter Net Sales Seasonality Q2-08 Q1-08 Q4-07 Q3-07 Q2-07 Q1-07 Q4-06 Q3-06 Q2-06 Q1-06 Q4-05 Q3-05 Q2-05 Q1-05 $225 $200 $175 $150 $125 $100 $75 $50 $25 $0 Q1-07 Q2-07 Q3-07 Q4-07 Q1-
Slide 8: Targeting Return to Profitability in Back Half
Quarterly Operating Profit Benefit of $10M+ +10-15% v Q2 +2M-$3M per Qtr Average second half seasonal sales improvement Profit Improvement Opportunities Targeting Return to Profitability in Back Half Impact Profitability will result from aggressive cost actions and expected return to historically hi
Slide 9: Summary
Macro-economic environment remains uncertain Long-term opportunity unchanged Need for sleep increasing Unique product – appreciated by customers Team with passion for product and customers Realizing improved performance due to Q1 actions Positioned for profitability in the second half Summary