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Minnesota
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41-1597886
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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9800 59th Avenue North
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Minneapolis, Minnesota
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55442
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
o
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Non-accelerated filer
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o
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(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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Page
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Item 1.
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Financial Statements
(unaudited)
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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April 1,
2017 |
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December 31,
2016 |
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Assets
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Current assets:
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Cash and cash equivalents
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$
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36,452
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$
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11,609
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Accounts receivable, net of allowance for doubtful accounts of $967 and $884, respectively
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18,227
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19,705
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Inventories
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66,858
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75,026
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Prepaid expenses
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10,673
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8,705
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Other current assets
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16,812
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23,282
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Total current assets
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149,022
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138,327
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Non-current assets:
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Property and equipment, net
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207,192
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208,367
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Goodwill and intangible assets, net
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79,223
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80,817
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Deferred income taxes
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—
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4,667
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Other non-current assets
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27,308
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24,988
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Total assets
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$
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462,745
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$
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457,166
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Liabilities and Shareholders’ Equity
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Current liabilities:
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Accounts payable
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$
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106,661
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$
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105,375
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Customer prepayments
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30,650
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26,207
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Accrued sales returns
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18,201
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15,222
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Compensation and benefits
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31,058
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19,455
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Taxes and withholding
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28,068
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23,430
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Other current liabilities
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37,551
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35,628
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Total current liabilities
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252,189
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225,317
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Non-current liabilities:
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Deferred income taxes
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996
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—
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Other non-current liabilities
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75,409
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71,529
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Total liabilities
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328,594
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296,846
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Shareholders’ equity:
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Undesignated preferred stock; 5,000 shares authorized, no shares issued and outstanding
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—
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—
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Common stock, $0.01 par value; 142,500 shares authorized, 41,676 and 43,569 shares issued and outstanding, respectively
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417
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436
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Additional paid-in capital
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—
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—
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Retained earnings
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133,734
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159,884
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Total shareholders’ equity
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134,151
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160,320
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Total liabilities and shareholders’ equity
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$
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462,745
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$
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457,166
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Three Months Ended
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April 1,
2017 |
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April 2,
2016 |
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Net sales
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$
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393,899
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$
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352,980
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Cost of sales
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147,440
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143,906
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Gross profit
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246,459
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209,074
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Operating expenses:
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Sales and marketing
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169,266
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150,668
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General and administrative
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33,769
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30,906
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Research and development
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7,596
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7,602
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Total operating expenses
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210,631
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189,176
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Operating income
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35,828
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19,898
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Other expense, net
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(138
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)
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(97
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)
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Income before income taxes
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35,690
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19,801
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Income tax expense
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11,229
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6,832
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Net income
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$
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24,461
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$
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12,969
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Basic net income per share:
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Net income per share – basic
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$
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0.57
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$
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0.27
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Weighted-average shares – basic
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42,750
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48,100
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Diluted net income per share:
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Net income per share – diluted
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$
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0.56
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$
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0.27
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Weighted-average shares – diluted
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43,712
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48,845
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Three Months Ended
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April 1,
2017 |
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April 2,
2016 |
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Net income
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$
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24,461
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$
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12,969
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Other comprehensive income – unrealized gain on available-for-sale marketable debt securities, net of income tax
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—
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14
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Comprehensive income
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$
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24,461
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$
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12,983
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Common Stock
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Additional
Paid-in
Capital
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Retained
Earnings
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Total
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|||||||||||
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Shares
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Amount
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Balance at December 31, 2016
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43,569
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$
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436
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$
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—
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$
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159,884
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$
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160,320
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Net income
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—
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—
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—
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24,461
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24,461
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Exercise of common stock options
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25
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—
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460
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—
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460
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Stock-based compensation
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506
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5
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3,699
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—
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3,704
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Repurchases of common stock
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(2,424
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)
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(24
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)
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(4,159
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)
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(50,611
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)
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(54,794
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)
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Balance at April 1, 2017
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41,676
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$
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417
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$
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—
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$
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133,734
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$
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134,151
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Three Months Ended
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||||||
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April 1,
2017 |
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April 2,
2016 |
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Cash flows from operating activities:
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Net income
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$
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24,461
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$
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12,969
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Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization
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16,205
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13,854
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Stock-based compensation
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3,704
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3,766
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Net loss on disposals and impairments of assets
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—
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1
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Excess tax benefits from stock-based compensation
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—
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(26
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)
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Deferred income taxes
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5,663
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1,622
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Changes in operating assets and liabilities:
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Accounts receivable
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1,478
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8,816
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Inventories
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8,168
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5,633
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Income taxes
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5,541
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16,558
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Prepaid expenses and other assets
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2,880
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(1,272
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)
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Accounts payable
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(1,394
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)
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(495
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)
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Customer prepayments
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4,443
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(20,537
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)
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Accrued compensation and benefits
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11,693
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10,677
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Other taxes and withholding
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(903
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)
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7,493
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Other accruals and liabilities
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4,930
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4,922
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Net cash provided by operating activities
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86,869
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63,981
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Cash flows from investing activities:
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|
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Purchases of property and equipment
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(13,211
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)
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(12,289
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)
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Proceeds from marketable debt securities
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—
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15,090
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Proceeds from sales of property and equipment
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—
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14
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Decrease in restricted cash
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3,150
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—
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Net cash (used in) provided by investing activities
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(10,061
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)
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2,815
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Cash flows from financing activities:
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Repurchases of common stock
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(54,794
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)
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(51,240
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)
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Net increase (decrease) in short-term borrowings
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2,369
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(6,661
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)
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Proceeds from issuance of common stock
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460
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6
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Excess tax benefits from stock-based compensation
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—
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26
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Debt issuance costs
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—
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(401
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)
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Net cash used in financing activities
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(51,965
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)
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(58,270
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)
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Net increase in cash and cash equivalents
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24,843
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8,526
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Cash and cash equivalents, at beginning of period
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11,609
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20,994
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Cash and cash equivalents, at end of period
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$
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36,452
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$
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29,520
|
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April 1,
2017 |
|
December 31,
2016 |
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Raw materials
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$
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4,846
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$
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7,973
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Work in progress
|
411
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72
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Finished goods
|
61,601
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|
|
66,981
|
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||
|
$
|
66,858
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|
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$
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75,026
|
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April 1, 2017
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|
December 31, 2016
|
||||||||||||
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Gross Carrying
Amount
|
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Accumulated
Amortization
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Gross Carrying
Amount
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Accumulated
Amortization
|
||||||||
Developed technologies
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$
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18,851
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$
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5,070
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$
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18,851
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$
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4,524
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Customer relationships
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2,413
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2,413
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2,413
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1,365
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|
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Trade names/trademarks
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101
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101
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101
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101
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||||
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$
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21,365
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$
|
7,584
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$
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21,365
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$
|
5,990
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|
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Three Months Ended
|
||||||
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April 1,
2017 |
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April 2,
2016 |
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Amount repurchased under Board-approved share repurchase program
|
|
$
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50,000
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$
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50,000
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Amount repurchased in connection with the vesting of employee restricted stock grants
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|
4,794
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1,240
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Total amount repurchased
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$
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54,794
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$
|
51,240
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Three Months Ended
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||||||
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April 1,
2017 |
|
April 2,
2016 |
||||
Stock awards
|
|
$
|
3,136
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$
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3,151
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Stock options
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|
568
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|
615
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||
Total stock-based compensation expense
|
|
3,704
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|
3,766
|
|
||
Income tax benefit
|
|
1,248
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|
1,299
|
|
||
Total stock-based compensation expense, net of tax
|
|
$
|
2,456
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|
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$
|
2,467
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Three Months Ended
|
||||||
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April 1,
2017 |
|
April 2,
2016 |
||||
Net income
|
$
|
24,461
|
|
|
$
|
12,969
|
|
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|
||||
Reconciliation of weighted-average shares outstanding:
|
|
|
|
|
|||
Basic weighted-average shares outstanding
|
42,750
|
|
|
48,100
|
|
||
Dilutive effect of stock-based awards
|
962
|
|
|
745
|
|
||
Diluted weighted-average shares outstanding
|
43,712
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|
48,845
|
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||
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|
||||
Net income per share – basic
|
$
|
0.57
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$
|
0.27
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Net income per share – diluted
|
$
|
0.56
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$
|
0.27
|
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Three Months Ended
|
||||||
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April 1,
2017 |
|
April 2,
2016 |
||||
Balance at beginning of year
|
$
|
15,222
|
|
|
$
|
20,562
|
|
Additions that reduce net sales
|
21,184
|
|
|
23,636
|
|
||
Deductions from reserves
|
(18,205
|
)
|
|
(21,288
|
)
|
||
Balance at end of period
|
$
|
18,201
|
|
|
$
|
22,910
|
|
|
Three Months Ended
|
||||||
|
April 1,
2017 |
|
April 2,
2016 |
||||
Balance at beginning of year
|
$
|
8,633
|
|
|
$
|
10,028
|
|
Additions charged to costs and expenses for current-year sales
|
2,718
|
|
|
3,585
|
|
||
Deductions from reserves
|
(2,049
|
)
|
|
(3,272
|
)
|
||
Changes in liability for pre-existing warranties during the current year, including expirations
|
(57
|
)
|
|
(574
|
)
|
||
Balance at end of period
|
$
|
9,245
|
|
|
$
|
9,767
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Risk Factors
|
•
|
Overview
|
•
|
Results of Operations
|
•
|
Liquidity and Capital Resources
|
•
|
Non-GAAP Data
|
•
|
Off-Balance-Sheet Arrangements and Contractual Obligations
|
•
|
Critical Accounting Policies
|
•
|
Current and future general and industry economic trends and consumer confidence;
|
•
|
The effectiveness of our marketing messages;
|
•
|
The efficiency of our advertising and promotional efforts;
|
•
|
Our ability to execute our Company-Controlled distribution strategy;
|
•
|
Our ability to achieve and maintain acceptable levels of product and service quality, and acceptable product return and warranty claims rates;
|
•
|
Our ability to continue to improve and expand our product line, and consumer acceptance of our products, product quality, innovation and brand image;
|
•
|
Industry competition, the emergence of additional competitive products and the adequacy of our intellectual property rights to protect our products and brand from competitive or infringing activities;
|
•
|
The potential for claims that our products, processes or trademarks infringe the intellectual property rights of others;
|
•
|
Availability of attractive and cost-effective consumer credit options;
|
•
|
Our “just-in-time” manufacturing processes with minimal levels of inventory, which may leave us vulnerable to shortages in supply;
|
•
|
Our dependence on significant suppliers and our ability to maintain relationships with key suppliers, including several sole-source suppliers;
|
•
|
Rising commodity costs and other inflationary pressures;
|
•
|
Risks inherent in global sourcing activities;
|
•
|
Risks of disruption in the operation of either of our two main manufacturing facilities;
|
•
|
Increasing government regulation;
|
•
|
Pending or unforeseen litigation and the potential for adverse publicity associated with litigation;
|
•
|
The adequacy of our management information systems to meet the evolving needs of our business and existing and evolving regulatory standards applicable to data privacy and security;
|
•
|
The costs and potential disruptions to our business related to upgrading our management information systems;
|
•
|
The vulnerability of our management information systems to attacks by hackers or other cyber threats that could compromise the security of our systems or disrupt our business;
|
•
|
Our ability to attract, retain and motivate qualified management, executive and other key employees, including qualified retail sales professionals and managers; and
|
•
|
Uncertainties arising from global events, such as terrorist attacks or a pandemic outbreak, or the threat of such events.
|
•
|
Net sales for the
three months ended
April 1, 2017
increased 12% to
$394 million
, compared with
$353 million
for the same period one year ago. The 12% sales increase resulted from a
3%
comparable sales
increase
in our Company-Controlled channel and 10 percentage points (ppt.) of growth from sales generated by
49
net new stores opened in the past 12 months.
|
•
|
The prior-year period's (ended April 2, 2016) net sales, gross profit rate, operating income, net income and earnings per share were negatively impacted by our ERP implementation. We completed the implementation by the end of the first quarter of 2016 and our new operating platform is enabling operating efficiencies, improved customer convenience and scalability.
|
•
|
Sales per store (for stores open at least one year), on a trailing twelve-month basis for the period ended
April 1, 2017
were
$2.4 million
, consistent with the prior-year comparable period.
|
•
|
Operating income for the quarter totaled
$36 million
, or
9.1%
of net sales, compared with
$20 million
, or
5.6%
of net sales, for the same period one year ago. The increase in operating income was attributable to the 12% increase in net sales and a 3.4 ppt. improvement in our gross profit rate.
|
•
|
Net income for the quarter was
$24 million
, or
$0.56
per diluted share, compared with net income of
$13 million
, or
$0.27
per diluted share, for the same period one year ago.
|
•
|
Cash provided by operating activities totaled
$87 million
for the
three months ended
April 1, 2017
, compared with
$64 million
for the same period one year ago. Investing activities for the current-year period included
$13 million
of property and equipment purchases, compared with
$12 million
for the same period last year.
|
•
|
At
April 1, 2017
, cash and cash equivalents totaled
$36 million
and we had $150 million of borrowing capacity available under our credit facility.
|
•
|
In the
first
quarter of
2017
, we repurchased
2.2 million
shares of our common stock under our Board-approved share repurchase program at a cost of
$50 million
(an average of
$22.49
per share). As of
April 1, 2017
, the remaining authorization was
$195 million
.
|
|
|
Three Months Ended
|
||||
|
|
April 1,
2017 |
|
April 2,
2016 |
||
Company-Controlled channel
|
|
98.2
|
%
|
|
97.3
|
%
|
Wholesale/Other channel
|
|
1.8
|
%
|
|
2.7
|
%
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
Three Months Ended
|
||||
|
|
April 1,
2017 |
|
April 2,
2016 |
||
Sales change rates:
|
|
|
|
|
||
Retail comparable-store sales
(1)
|
|
2
|
%
|
|
(4
|
%)
|
Online and Phone
|
|
18
|
%
|
|
8
|
%
|
Company-Controlled comparable sales change
|
|
3
|
%
|
|
(4
|
%)
|
Net opened/closed stores
|
|
10
|
%
|
|
5
|
%
|
Total Company-Controlled channel
|
|
13
|
%
|
|
1
|
%
|
Wholesale/Other channel
|
|
(23
|
%)
|
|
10
|
%
|
Total net sales change
|
|
12
|
%
|
|
1
|
%
|
|
|
|
Three Months Ended
|
||||||
|
|
April 1,
2017 |
|
April 2,
2016 |
||||
Average sales per store
(1)
($ in thousands)
|
|
$
|
2,365
|
|
|
$
|
2,363
|
|
Average sales per square foot
(1)
|
|
$
|
926
|
|
|
$
|
960
|
|
Stores > $1 million in net sales
(1)
|
|
97
|
%
|
|
98
|
%
|
||
Stores > $2 million in net sales
(1)
|
|
59
|
%
|
|
61
|
%
|
||
Average revenue per mattress unit – Company-Controlled channel
(2)
|
|
$
|
4,053
|
|
|
$
|
3,978
|
|
|
|
|
Three Months Ended
|
||||||
|
|
April 1,
2017 |
|
April 2,
2016 |
||||
Total cash provided by (used in):
|
|
|
|
|
||||
Operating activities
|
|
$
|
86.9
|
|
|
$
|
64.0
|
|
Investing activities
|
|
(10.1
|
)
|
|
2.8
|
|
||
Financing activities
|
|
(52.0
|
)
|
|
(58.3
|
)
|
||
Net increase in cash and cash equivalents
|
|
$
|
24.8
|
|
|
$
|
8.5
|
|
|
|
Three Months Ended
|
|
Trailing-Twelve
Months Ended
|
||||||||||||
|
|
April 1,
2017 |
|
April 2,
2016 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||||
Net income
|
|
$
|
24,461
|
|
|
$
|
12,969
|
|
|
$
|
62,909
|
|
|
$
|
34,689
|
|
Income tax expense
|
|
11,229
|
|
|
6,832
|
|
|
28,913
|
|
|
16,664
|
|
||||
Interest expense
|
|
182
|
|
|
106
|
|
|
887
|
|
|
256
|
|
||||
Depreciation and amortization
|
|
16,152
|
|
|
13,757
|
|
|
59,305
|
|
|
50,129
|
|
||||
Stock-based compensation
|
|
3,704
|
|
|
3,766
|
|
|
11,899
|
|
|
11,274
|
|
||||
Asset impairments
|
|
—
|
|
|
15
|
|
|
59
|
|
|
67
|
|
||||
Adjusted EBITDA
|
|
$
|
55,728
|
|
|
$
|
37,445
|
|
|
$
|
163,972
|
|
|
$
|
113,079
|
|
|
|
Three Months Ended
|
|
Trailing-Twelve
Months Ended
|
||||||||||||
|
|
April 1,
2017 |
|
April 2,
2016 |
|
April 1,
2017 |
|
April 2,
2016 |
||||||||
Net cash provided by operating activities
|
|
$
|
86,869
|
|
|
$
|
63,981
|
|
|
$
|
174,533
|
|
|
$
|
123,059
|
|
Subtract: Purchases of property and equipment
|
|
13,211
|
|
|
12,289
|
|
|
58,774
|
|
|
80,079
|
|
||||
Free cash flow
|
|
$
|
73,658
|
|
|
$
|
51,692
|
|
|
$
|
115,759
|
|
|
$
|
42,980
|
|
|
|
Trailing-Twelve
Months Ended
|
||||||
|
|
April 1,
2017 |
|
April 2,
2016 |
||||
Net operating profit after taxes (NOPAT)
|
|
|
|
|
||||
Operating income
|
|
$
|
92,580
|
|
|
$
|
51,270
|
|
Add: Rent expense
(1)
|
|
69,217
|
|
|
63,204
|
|
||
Add: Interest income
|
|
128
|
|
|
340
|
|
||
Less: Depreciation on capitalized operating leases
(2)
|
|
(17,550
|
)
|
|
(16,501
|
)
|
||
Less: Income taxes
(3)
|
|
(48,050
|
)
|
|
(31,992
|
)
|
||
NOPAT
|
|
$
|
96,325
|
|
|
$
|
66,321
|
|
|
|
|
|
|
||||
Average invested capital
|
|
|
|
|
||||
Total equity
|
|
$
|
134,151
|
|
|
$
|
187,184
|
|
Less: Cash greater than target
(4)
|
|
—
|
|
|
—
|
|
||
Add: Long-term debt
(5)
|
|
—
|
|
|
—
|
|
||
Add: Capitalized operating lease obligations
(6)
|
|
553,736
|
|
|
505,632
|
|
||
Total invested capital at end of period
|
|
$
|
687,887
|
|
|
$
|
692,816
|
|
Average invested capital
(7)
|
|
$
|
692,896
|
|
|
$
|
729,234
|
|
Return on invested capital (ROIC)
(8)
|
|
13.9
|
%
|
|
9.1
|
%
|
(a) – (b)
|
Not applicable.
|
(c)
|
Issuer Purchases of Equity Securities
|
Fiscal Period
|
|
Total
Number
of Shares
Purchased
(1)(2)
|
|
Average
Price
Paid
per Share
|
|
Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Plans or
Programs
(1)
|
|
Approximate
Dollar Value
of Shares that
May Yet Be
Purchased
Under the
Plans or
Programs
(3)
|
||||||
January 1, 2017 through January 28, 2017
|
|
619,080
|
|
|
$
|
21.24
|
|
|
613,198
|
|
|
$
|
231,980,000
|
|
January 29, 2017 through February 25, 2017
|
|
657,972
|
|
|
21.28
|
|
|
646,278
|
|
|
218,243,000
|
|
||
February 26, 2017 through April 1, 2017
|
|
1,146,491
|
|
|
24.11
|
|
|
963,808
|
|
|
195,000,000
|
|
||
Total
|
|
2,423,543
|
|
|
$
|
22.61
|
|
|
2,223,284
|
|
|
$
|
195,000,000
|
|
|
(1)
|
Under our Board-approved
$300 million
share repurchase program, we repurchased
2,223,284
shares of our common stock at a cost of
$50 million
(based on trade dates) during the three months ended
April 1, 2017
.
|
(2)
|
In connection with the vesting of employee restricted stock grants, we also repurchased
200,259
shares of our common stock at a cost of
$4.8 million
during the three months ended
April 1, 2017
.
|
(1)
|
There is no expiration date governing the period over which we can repurchase shares under our Board-approved share repurchase program. Any repurchased shares are constructively retired and returned to an unissued status.
|
Exhibit
Number
|
|
Description
|
|
Method of Filing
|
10.1
|
|
Second Amendment Agreement to Credit and Security Agreement dated as of September 9, 2015 by and among Select Comfort Corporation, Key Bank National Association, as Administrative Agent, Swing Line Lender and Issuing Lender and the other financial institutions from time to time party thereto
|
|
Filed herewith
|
10.2
|
|
Form of Performance-Based Restricted Stock Unit Award Agreement - EPS Target
|
|
Filed herewith
|
31.1
|
|
Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
31.2
|
|
Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
32.1
|
|
Certification of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
|
|
Furnished herewith
|
32.2
|
|
Certification of CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
|
|
Furnished herewith
|
101
|
|
The following financial information from the Company's Quarterly Report on Form 10-Q for the period ended April 1, 2017, filed with the SEC on May 1, 2017, formatted in eXtensible Business Reporting Language: (i) Condensed Consolidated Balance Sheets as of April 1, 2017 and December 31, 2016; (ii) Condensed Consolidated Statements of Operations for the three months ended April 1, 2017 and April 2, 2016; (iii) Condensed Consolidated Statements of Comprehensive Income for the three months ended April 1, 2017 and April 2, 2016; (iv) Condensed Consolidated Statement of Shareholders' Equity for the three months ended April 1, 2017; (v) Condensed Consolidated Statements of Cash Flows for the three months ended April 1, 2017 and April 2, 2016; and (vi) Notes to Condensed Consolidated Financial Statements.
|
|
Filed herewith
|
|
|
SELECT COMFORT CORPORATION
|
|
||
|
|
(Registrant)
|
|
||
|
|
|
|
||
Dated:
|
May 1, 2017
|
By:
|
|
/s/ Shelly R. Ibach
|
|
|
|
|
|
Shelly R. Ibach
|
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
(principal executive officer)
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Robert J. Poirier
|
|
|
|
|
|
Robert J. Poirier
|
|
|
|
|
|
Chief Accounting Officer
|
|
|
|
|
|
(principal accounting officer)
|
|
Exhibit
Number
|
|
Description
|
|
Method of Filing
|
10.1
|
|
Second Amendment Agreement to Credit and Security Agreement dated as of September 9, 2015 by and among Select Comfort Corporation, Key Bank National Association, as Administrative Agent, Swing Line Lender and Issuing Lender and the other financial institutions from time to time party thereto
|
|
Filed herewith
|
10.2
|
|
Form of Performance-Based Restricted Stock Unit Award Agreement - EPS Target
|
|
Filed herewith
|
31.1
|
|
Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
31.2
|
|
Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
32.1
|
|
Certification of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
|
|
Furnished herewith
|
32.2
|
|
Certification of CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
|
|
Furnished herewith
|
101
|
|
The following financial information from the Company's Quarterly Report on Form 10-Q for the period ended April 1, 2017, filed with the SEC on May 1, 2017, formatted in eXtensible Business Reporting Language: (i) Condensed Consolidated Balance Sheets as of April 1, 2017 and December 31, 2016; (ii) Condensed Consolidated Statements of Operations for the three months ended April 1, 2017 and April 2, 2016; (iii) Condensed Consolidated Statements of Comprehensive Income for the three months ended April 1, 2017 and April 2, 2016; (iv) Condensed Consolidated Statement of Shareholders' Equity for the three months ended April 1, 2017; (v) Condensed Consolidated Statements of Cash Flows for the three months ended April 1, 2017 and April 2, 2016; and (vi) Notes to Condensed Consolidated Financial Statements.
|
|
Filed herewith
|
|
SELECT COMFORT CORPORATION
By:
/s/ Robert Poirier
Robert Poirier
Vice President and Chief Accounting Officer
|
|
KEYBANK NATIONAL ASSOCIATION
as the Administrative Agent and as a Lender
By:
/s/ Marianne T. Meil
Marianne T. Meil
Senior Vice President
|
|
BMO HARRIS BANK, N.A.
By:
/s/ Wesley M. Anderson
Wesley M. Anderson
Director
|
|
U.S. BANK NATIONAL ASSOCIATION
By:
/s/ Peter I. Bystol
Peter I. Bystol
Senior Vice President
|
|
SELECT COMFORT RETAIL CORPORATION
SELECT COMFORT CANADA HOLDING INC.
SELECT COMFORT SC CORPORATION
SLEEPIQ LABS INC.
By:
/s/ Robert Poirier
Robert Poirier
Vice President and Chief Accounting Officer
|
LENDERS
|
REVOLVING CREDIT
COMMITMENT
PERCENTAGE
|
REVOLVING
CREDIT
COMMITMENT
AMOUNT
|
MAXIMUM AMOUNT
|
KeyBank National Association
|
33.3333%
|
$51,050,000.00
|
$51,050,000.00
|
BMO Harris Bank, N.A.
|
33.3333%
|
$51,050,000.00
|
$51,050,000.00
|
U.S. Bank National Association
|
33.3333%
|
$51,050,000.00
|
$51,050,000.00
|
Total Commitment Amount
|
100%
|
$153,150,000.00
|
$153,150,000.00
|
|
|
SELECT COMFORT CORPORATION
|
|
|
|
|
|
/s/ Shelly Ibach
|
|
|
|
|
|
Shelly Ibach
|
|
|
President and CEO
|
|
|
|
By execution of this Agreement,
the Grantee acknowledges having
received a copy of the Plan.
|
|
GRANTEE
|
|
|
|
|
|
(Signature)
|
|
|
|
|
|
|
|
|
(Name and Address)
|
|
|
|
|
|
|
|
|
|
PARTIES:
|
Select Comfort Corporation
9800 59th Ave N
Minneapolis, MN 55442
|
(the "Company")
|
|
|
|
|
|
(the "Employee")
|
|
|
|
|
|
(Address)
|
Date
|
|
|
|
|
SELECT COMFORT CORPORATION
|
|
|
|
|
|
/s/ Shelly Ibach
|
|
|
|
|
|
Shelly Ibach
|
|
|
President and CEO
|
|
|
|
By execution of this Agreement,
the Grantee acknowledges having
received a copy of the Plan.
|
|
EMPLOYEE
|
|
|
|
|
|
(Signature)
|
|
|
|
|
|
|
|
|
(Name and Address)
|
|
|
|
|
|
|
1.
|
I have reviewed this
quarterly
report on
Form 10-Q
of Select Comfort Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
May 1, 2017
|
|
|
|
|
|
|
|
|
|
/s/ Shelly R. Ibach
|
|
|
|
Shelly R. Ibach
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this
quarterly
report on
Form 10-Q
of Select Comfort Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
May 1, 2017
|
|
|
|
|
|
|
|
|
|
/s/ David R. Callen
|
|
|
|
David R. Callen
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
May 1, 2017
|
|
|
|
|
|
|
|
|
|
/s/ Shelly R. Ibach
|
|
|
|
Shelly R. Ibach
|
|
|
|
Chief Executive Officer
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
May 1, 2017
|
|
|
|
|
|
|
|
|
|
/s/ David R. Callen
|
|
|
|
David R. Callen
|
|
|
|
Senior Vice President and Chief Financial Officer
|