Sleep Number (SNBR) 10-Q 12 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	9 Months Ended
	Oct. 03, 2015shares
Document and Entity Information [Abstract]
Entity Registrant Name	SELECT COMFORT CORP
Entity Central Index Key	827,187
Current Fiscal Year End Date	--01-02
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Oct. 3, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding	50,646,000

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Oct. 03, 2015	Jan. 03, 2015
Current assets:
Cash and cash equivalents	$ 72,678	$ 51,995
Marketable debt securities – current	33,243	69,609
Accounts receivable, net of allowance for doubtful accounts of $750 and $739, respectively	26,286	19,693
Inventories	77,753	53,535
Prepaid expenses	14,815	17,792
Deferred income taxes	8,561	8,786
Other current assets	12,865	11,185
Total current assets	246,201	232,595
Non-current assets:
Marketable debt securities – non-current	8,581	44,441
Property and equipment, net	197,886	165,453
Goodwill and intangible assets, net	85,093	15,986
Deferred income taxes	10,219	3,433
Other assets	17,913	12,279
Total assets	565,893	474,187
Current liabilities:
Accounts payable	115,330	84,197
Customer prepayments	25,387	28,726
Accrued sales returns	19,313	15,262
Compensation and benefits	32,960	33,066
Taxes and withholding	25,236	10,207
Other current liabilities	25,100	15,594
Total current liabilities	243,326	187,052
Non-current liabilities:
Warranty liabilities	5,143	2,722
Other long-term liabilities	45,501	27,506
Total liabilities	293,970	217,280
Shareholders’ equity:
Undesignated preferred stock; 5,000 shares authorized, no shares issued and outstanding	0	0
Common stock, $0.01 par value; 142,500 shares authorized, 50,646 and 52,798 shares issued and outstanding, respectively	506	528
Additional paid-in capital	0	0
Retained earnings	271,410	256,413
Accumulated other comprehensive income (loss)	7	(34)
Total shareholders’ equity	271,923	256,907
Total liabilities and shareholders’ equity	$ 565,893	$ 474,187

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Oct. 03, 2015	Jan. 03, 2015
Current assets:
Accounts receivable, net of allowance for doubtful accounts	$ 750	$ 739
Shareholders’ equity:
Undesignated preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Undesignated preferred stock, shares issued (in shares)	0	0
Undesignated preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	142,500,000	142,500,000
Common stock, shares issued (in shares)	50,646,000	52,798,000
Common stock, shares outstanding (in shares)	50,646,000	52,798,000

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014
Income Statement [Abstract]
Net sales	$ 373,919	$ 323,366	$ 999,017	$ 834,541
Cost of sales	140,283	124,782	379,009	322,177
Gross profit	233,636	198,584	620,008	512,364
Operating expenses:
Sales and marketing	156,899	137,863	424,029	369,597
General and administrative	27,817	23,022	79,951	63,183
Research and development	3,521	2,353	10,275	5,725
Total operating expenses	188,237	163,238	514,255	438,505
Operating income	45,399	35,346	105,753	73,859
Other income, net	78	96	364	276
Income before income taxes	45,477	35,442	106,117	74,135
Income tax expense	13,623	11,888	34,426	25,108
Net income	$ 31,854	$ 23,554	$ 71,691	$ 49,027
Basic net income per share:
Net income per share – basic (in USD per share)	$ 0.63	$ 0.44	$ 1.39	$ 0.91
Weighted-average shares – basic (in shares)	50,945,000	53,271,000	51,654,000	53,677,000
Diluted net income per share:
Net income per share – diluted (in USD per share)	$ 0.62	$ 0.44	$ 1.36	$ 0.90
Weighted-average shares – diluted (in shares)	51,701,000	53,971,000	52,524,000	54,358,000

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014
Statement of Comprehensive Income [Abstract]
Net income	$ 31,854	$ 23,554	$ 71,691	$ 49,027
Other comprehensive (loss) income – unrealized (loss) gain on available-for-sale marketable debt securities, net of income tax	(11)	(35)	41	(5)
Comprehensive income	$ 31,843	$ 23,519	$ 71,732	$ 49,022

Consolidated Statement of Share

Consolidated Statement of Shareholders' Equity - 9 months ended Oct. 03, 2015 - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Balance (in shares) at Jan. 03, 2015	52,798,000	52,798,000
Balance at Jan. 03, 2015	$ 256,907	$ 528	$ 0	$ 256,413	$ (34)
Net income	71,691	0	0		0
Other comprehensive income:
Unrealized gain on available-for-sale marketable debt securities, net of tax	41	$ 0	0	0	41
Exercise of common stock options (in shares)		212,000
Exercise of common stock options	2,658	$ 2	2,656	0	0
Tax effect from stock-based compensation	1,974	$ 0	1,974	0	0
Stock-based compensation (in shares)		(6,000)
Stock-based compensation	8,952	$ 0	8,952	0	0
Repurchases of common stock (in shares)		(2,358,000)
Repurchases of common stock	$ (70,300)	$ (24)	(13,582)	(56,694)	0
Balance (in shares) at Oct. 03, 2015	50,646,000	50,646,000
Balance at Oct. 03, 2015	$ 271,923	$ 506	$ 0	$ 271,410	$ 7

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014
Cash flows from operating activities:
Net income	$ 71,691	$ 49,027
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	33,694	29,579
Stock-based compensation	8,952	4,294
Net loss on disposals and impairments of assets	202	115
Excess tax benefits from stock-based compensation	(1,991)	(754)
Deferred income taxes	(5,633)	(4,306)
Gain on non-marketable equity securities	(6,891)	0
Changes in operating assets and liabilities, net of effect of acquisition:
Accounts receivable	(6,543)	(14,195)
Inventories	(24,120)	(8,552)
Income taxes	13,433	9,883
Prepaid expenses and other assets	4,756	(4,146)
Accounts payable	24,623	27,359
Customer prepayments	(3,351)	13,847
Accrued compensation and benefits	(97)	17,318
Other taxes and withholding	3,569	4,484
Warranty liabilities	3,945	953
Other accruals and liabilities	15,348	10,929
Net cash provided by operating activities	131,587	135,835
Cash flows from investing activities:
Proceeds from marketable debt securities	101,087	38,237
Acquisition of business	(70,018)	0
Purchases of property and equipment	(61,435)	(58,377)
Investments in marketable debt securities	(29,299)	(58,403)
Proceeds from non-marketable equity securities	12,891	0
Proceeds from sales of property and equipment	41	5
Increase in restricted cash	0	(500)
Net cash used in investing activities	(46,733)	(79,038)
Cash flows from financing activities:
Repurchases of common stock	(70,300)	(31,480)
Proceeds from issuance of common stock	2,658	1,631
Net increase (decrease) in short-term borrowings	2,119	(7,499)
Excess tax benefits from stock-based compensation	1,991	754
Debt issuance costs	(639)	0
Net cash used in financing activities	(64,171)	(36,594)
Net increase in cash and cash equivalents	20,683	20,203
Cash and cash equivalents, at beginning of period	51,995	58,223
Cash and cash equivalents, at end of period	$ 72,678	$ 78,426

Basis of Presentation

Basis of Presentation	9 Months Ended
	Oct. 03, 2015
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation We prepared the condensed consolidated financial statements as of and for the three and nine months ended October 3, 2015 of Select Comfort Corporation and 100%-owned subsidiaries (Select Comfort or the Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and they reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly our financial position as of October 3, 2015 , and January 3, 2015 , and the consolidated results of operations and cash flows for the periods presented. Our historical and quarterly consolidated results of operations may not be indicative of the results that may be achieved for the full year or any future period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with our most recent audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 3, 2015 and other recent filings with the SEC. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of sales, expenses and income taxes during the reporting period. Predicting future events is inherently an imprecise activity and, as such, requires the use of judgment. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates will be reflected in the financial statements in future periods. Our critical accounting policies consist of stock-based compensation, goodwill and indefinite-lived intangible assets, warranty liabilities and revenue recognition. The condensed consolidated financial statements include the accounts of Select Comfort Corporation and our 100%-owned subsidiaries. All significant intra-entity balances and transactions have been eliminated in consolidation. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. This new guidance was originally effective for fiscal years beginning after December 15, 2016 and early adoption was not permitted. In July 2015, the FASB deferred the effective date from fiscal years beginning after December 15, 2016 to fiscal years beginning after December 15, 2017 (including interim reporting periods within those fiscal years). Early adoption is permitted to the original effective date of fiscal years beginning after December 15, 2016 (including interim reporting periods within those fiscal years). Companies may use either a full retrospective or a modified retrospective approach to adopt this new guidance. We are evaluating the effect of the new standard on our consolidated financial statements and related disclosures, and have not yet selected a transition method. In 2015, the FASB issued new guidance related to business combinations. The new guidance requires that adjustments made to provisional amounts recognized in a business combination be recorded in the period such adjustments are determined, rather than retrospectively adjusting previously reported amounts. The new guidance is effective for fiscal years, and interim reporting periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. We are evaluating the impact, if any, of adopting this new accounting guidance on our consolidated financial statements and related disclosures. We will adopt the new guidance in the first quarter of 2016.

Acquisition of BAM Labs Inc.

Acquisition of BAM Labs Inc.	9 Months Ended
	Oct. 03, 2015
Acquisition of BAM Labs, Inc. [Abstract]
Acquisition of BAM Labs., Inc. [Text Block]	Acquisition of BAM Labs, Inc. In September 2015 , we completed the acquisition of BAM Labs, Inc. (BAM Labs), the leading provider of biometric sensor and sleep monitoring for data-driven health and wellness . The addition of BAM Labs strengthens Sleep Number’s leadership in sleep innovation, adjustability and individualization. The acquisition broadens and deepens electrical, biomedical, software and backend capabilities - API (application program interface) and bio-signal analysis. Our ownership and control of biometric data advances smart, connected products that empower our customers to ‘know better sleep.’ We previously held a $6.0 million minority equity investment in BAM Labs based on the cost method (see Note 4, Investments, for further details). In connection with the acquisition, our equity investment was remeasured to a fair value of $12.9 million . We acquired the remaining capital stock of BAM Labs for $57.1 million for a total enterprise value of $70.0 million . The acquisition of BAM Labs did not have a significant impact on our consolidated results of operations, operating cash flows or financial position. The following table summarizes the preliminary fair value of the net assets acquired as of October 3, 2015 (in thousands): Accounts receivable $ 104 Inventories 98 Prepaid expenses 98 Property and equipment 91 Deferred income taxes 954 Goodwill 56,201 Intangible assets 13,619 Total assets acquired 71,165 Accounts payable 267 Compensation and benefits 322 Other liabilities 558 Total liabilities acquired 1,147 Net assets acquired $ 70,018 Purchased intangible assets of $13.6 million consisted of developed technologies with an estimated useful life of eight years . The definite-lived intangible assets will be deductible for income tax purposes over 15 years on a straight-line basis. The goodwill will not be deductible for income tax purposes. Purchase accounting is considered preliminary, subject to revision, mainly with respect to certain working capital accounts, income taxes and goodwill, as final information was not available as of October 3, 2015 .

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Oct. 03, 2015
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements The following tables set forth by level within the fair value hierarchy, our financial assets that were accounted for at fair value on a recurring basis, according to the valuation techniques we used to determine their fair value (in thousands): October 3, 2015 Level 1 Level 2 Level 3 Total Marketable debt securities – current Corporate bonds $ — $ 12,597 $ — $ 12,597 Commercial paper — 9,993 — 9,993 Municipal bonds — 8,140 — 8,140 U.S. Agency bonds — 2,513 — 2,513 — 33,243 — 33,243 Marketable debt securities – non-current Corporate bonds — 5,013 — 5,013 U.S. Agency bonds — 2,498 — 2,498 Municipal bonds — 1,070 — 1,070 — 8,581 — 8,581 $ — $ 41,824 $ — $ 41,824 January 3, 2015 Level 1 Level 2 Level 3 Total Marketable debt securities – current U.S. Treasury securities $ 17,506 $ — $ — $ 17,506 Corporate bonds — 20,139 — 20,139 U.S. Agency bonds — 12,525 — 12,525 Commercial paper — 12,486 — 12,486 Municipal bonds — 6,953 — 6,953 17,506 52,103 — 69,609 Marketable debt securities – non-current U.S. Treasury securities 14,990 — — 14,990 Corporate bonds — 15,236 — 15,236 U.S. Agency bonds — 10,014 — 10,014 Municipal bonds — 4,201 — 4,201 14,990 29,451 — 44,441 $ 32,496 $ 81,554 $ — $ 114,050 At October 3, 2015 and January 3, 2015 , we had $1.5 million and $1.0 million , respectively, of debt and equity securities that fund our deferred compensation plan and are classified in other assets in our condensed consolidated balance sheets. We also had corresponding deferred compensation plan liabilities of $1.5 million and $1.0 million at October 3, 2015 and January 3, 2015 , respectively, which are included in other long-term liabilities in our condensed consolidated balance sheets. The majority of the debt and equity securities are Level 1 as they trade with sufficient frequency and volume to enable us to obtain pricing information on an ongoing basis. Unrealized gains/(losses) on the debt and equity securities offset those associated with the corresponding deferred compensation plan liabilities.

Investments

Investments	9 Months Ended
	Oct. 03, 2015
Investments [Abstract]
Investments	Investments Marketable Debt Securities Investments in marketable debt securities were comprised of the following (in thousands): October 3, 2015 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate bonds $ 17,612 $ 4 $ (6 ) $ 17,610 U.S. Agency bonds 4,998 13 — 5,011 Commercial paper 9,993 — — 9,993 Municipal bonds 9,209 2 (1 ) 9,210 $ 41,812 $ 19 $ (7 ) $ 41,824 January 3, 2015 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate bonds $ 35,409 $ 2 $ (36 ) $ 35,375 U.S. Treasury securities 32,507 12 (23 ) 32,496 U.S. Agency bonds 22,545 4 (10 ) 22,539 Commercial paper 12,487 — (1 ) 12,486 Municipal bonds 11,157 2 (5 ) 11,154 $ 114,105 $ 20 $ (75 ) $ 114,050 Maturities of marketable debt securities were as follows (in thousands): October 3, 2015 January 3, 2015 Amortized Cost Fair Value Amortized Cost Fair Value Marketable debt securities – current (due in less than one year) $ 33,231 $ 33,243 $ 69,607 $ 69,609 Marketable debt securities – non-current (due in one to two years) 8,581 8,581 44,498 44,441 $ 41,812 $ 41,824 $ 114,105 $ 114,050 During the three months ended October 3, 2015 and September 27, 2014 , we received proceeds of $59.2 million and $14.6 million , respectively, from marketable debt securities. During the nine months ended October 3, 2015 and September 27, 2014 , we received proceeds of $101.0 million and $38.1 million , respectively, from marketable debt securities. Other Investments We previously held a minority equity investment in one of our strategic product-development partners, BAM Labs. In September 2015, we completed the acquisition of the remaining outstanding capital stock of BAM Labs. The carrying value of our equity investment in BAM Labs prior to the acquisition was $6.0 million based on the cost method. In connection with the acquisition, our equity investment was remeasured to a fair value of $12.9 million , resulting in a $3.0 million gain net of: (i) $3.4 million of acquisition related expenses; and (ii) $0.5 million of incremental BAM Labs research and development expenses. The remeasured fair value of our equity investment was based on the fair value of BAM Labs at the acquisition date. The net gain of $3.5 million is included in general and administrative expenses and the incremental BAM Labs expenses of $0.5 million are included in research and development expenses on our condensed consolidated statements of operations for the three and nine months ended October 3, 2015. See Note 2, Acquisition of BAM Labs, Inc. , for details regarding this acquisition.

Inventories

Inventories	9 Months Ended
	Oct. 03, 2015
Inventory Disclosure [Abstract]
Inventories	Inventories Inventories consisted of the following (in thousands): October 3, January 3, Raw materials $ 13,558 $ 10,220 Work in progress 830 411 Finished goods 63,365 42,904 $ 77,753 $ 53,535

Goodwill and Intangible Assets

Goodwill and Intangible Assets	9 Months Ended
	Oct. 03, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets	Goodwill and Intangible Assets Goodwill and Indefinite-Lived Intangible Assets The following is a roll forward of goodwill and indefinite-lived trade name/trademarks (in thousands): Nine Months Ended Nine Months Ended October 3, 2015 September 27, 2014 Goodwill Indefinite-Lived Goodwill Indefinite-Lived Beginning balance $ 8,963 $ 1,396 $ 8,963 $ 1,396 BAM Labs acquisition 56,201 — — — Ending balance $ 65,164 $ 1,396 $ 8,963 $ 1,396 Definite-Lived Intangible Assets The following table provides the gross carrying amount and related accumulated amortization of our definite-lived intangible assets (in thousands): October 3, 2015 January 3, 2015 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Developed technologies (1) $ 18,850 $ 1,796 $ 5,231 $ 1,342 Customer relationships 2,413 934 2,413 675 Trade names/trademarks 101 101 101 101 $ 21,364 $ 2,831 $ 7,745 $ 2,118 (1) In September 2015, in connection with the acquisition of BAM Labs, Inc., we acquired $13.6 million of definite-lived intangible assets consisting of developed technologies. Amortization expense for definite-lived intangible assets was $0.3 million and $0.7 million for the three and nine months ended October 3, 2015 , respectively, and $0.2 million and $0.6 million for the three and nine months ended September 27, 2014 , respectively. Annual amortization for definite-lived intangible assets is expected to be approximately $2.5 million for each of the next five years. See Note 2, Acquisition of BAM Labs , Inc., for additional details.

Credit Agreement

Credit Agreement	9 Months Ended
	Oct. 03, 2015
Debt Disclosure [Abstract]
Debt	Credit Agreement In September 2015, we entered into a new revolving credit facility (Credit Agreement) with a syndicate of banks (Lenders). The Credit Agreement provides a revolving credit facility for general corporate purposes with net aggregate availability of $100 million . The Credit Agreement contains an accordion feature that allows us to increase the amount of the credit facility from $100 million up to $150 million in total availability, subject to Lenders' approval. The Credit Agreement matures in September 2020 . The Credit Agreement replaced our $20 million credit facility that was set to expire in August 2016 . The Credit Agreement provides the Lenders with a collateral security interest in substantially all of our assets and those of our subsidiaries and requires us to comply with, among other things, a maximum leverage ratio and a minimum interest coverage ratio. Under the terms of the Credit Agreement, we pay a variable rate of interest and a commitment fee based on our leverage ratio. As of October 3, 2015, we had no outstanding borrowings or letters of credit and we were in compliance with all financial covenants.

Repurchase of Common Stock

Repurchase of Common Stock	9 Months Ended
	Oct. 03, 2015
Repurchase of Common Stock [Abstract]
Repurchase of Common Stock	Repurchase of Common Stock Repurchases of our common stock were as follows (in thousands): Three Months Ended Nine Months Ended October 3, September 27, October 3, September 27, Amount repurchased under Board-approved share repurchase program $ 18,530 $ 10,010 $ 68,557 $ 30,032 Amount repurchased in connection with the vesting of employee restricted stock grants 140 — 1,743 1,448 Total amount repurchased $ 18,670 $ 10,010 $ 70,300 $ 31,480 As of October 3, 2015 , the remaining share repurchase authorization under our Board-approved share repurchase plan was $166 million . There is no expiration date governing the period over which we can repurchase shares. Any repurchased shares are constructively retired and returned to an unissued status. The cost of share repurchases is first charged to additional paid-in capital. Once additional paid-in capital is reduced to zero, any additional amounts are charged to retained earnings.

Stock-Based Compensation

Stock-Based Compensation	9 Months Ended
	Oct. 03, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	Stock-Based Compensation Stock-based compensation expense consisted of the following (in thousands): Three Months Ended Nine Months Ended October 3, September 27, October 3, September 27, Options $ 668 $ 574 $ 1,984 $ 1,503 Restricted shares 2,456 1,685 6,968 2,791 Total stock-based compensation expense (1) 3,124 2,259 8,952 4,294 Income tax benefit 904 768 2,909 1,464 Total stock-based compensation expense, net of tax $ 2,220 $ 1,491 $ 6,043 $ 2,830 (1) The nine months ended September 27, 2014 includes a $1.2 million benefit related to a change in estimated forfeitures due to employee turnover during the three months ended March 29, 2014.

Employee Benefits

Employee Benefits	9 Months Ended
	Oct. 03, 2015
Profit Sharing and 401 (k) Plan [Abstract]
Employee Benefits	Employee Benefits Under our profit sharing and 401(k) plan, eligible employees may defer up to 50% of their compensation on a pre-tax basis, subject to Internal Revenue Service limitations. Each calendar quarter, we may make a discretionary contribution equal to a percentage of the employee’s contribution. During the three months ended October 3, 2015 and September 27, 2014 , our contributions, net of forfeitures, were $1.3 million and $0.9 million , respectively. During the nine months ended October 3, 2015 and September 27, 2014 , our contributions, net of forfeitures, were $3.3 million and $2.7 million , respectively.

Other Income, Net

Other Income, Net	9 Months Ended
	Oct. 03, 2015
Other Income and Expenses [Abstract]
Other Income, Net	Other Income, Net Other income, net, consisted of the following (in thousands): Three Months Ended Nine Months Ended October 3, September 27, October 3, September 27, Interest income $ 122 $ 106 $ 428 $ 306 Interest expense (44 ) (10 ) (64 ) (30 ) Other income, net $ 78 $ 96 $ 364 $ 276

Net Income Per Common Share

Net Income Per Common Share	9 Months Ended
	Oct. 03, 2015
Earnings Per Share [Abstract]
Net Income per Common Share	Net Income per Common Share The components of basic and diluted net income per share were as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended October 3, September 27, October 3, September 27, Net income $ 31,854 $ 23,554 $ 71,691 $ 49,027 Reconciliation of weighted-average shares outstanding: Basic weighted-average shares outstanding 50,945 53,271 51,654 53,677 Dilutive effect of stock-based awards 756 700 870 681 Diluted weighted-average shares outstanding 51,701 53,971 52,524 54,358 Net income per share – basic $ 0.63 $ 0.44 $ 1.39 $ 0.91 Net income per share – diluted $ 0.62 $ 0.44 $ 1.36 $ 0.90 Anti-dilutive stock-based awards excluded from the calculations of diluted net income per share calculations were immaterial for the periods presented.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Oct. 03, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Sales Returns The activity in the sales returns liability account was as follows (in thousands): Nine Months Ended October 3, September 27, Balance at beginning of year $ 15,262 $ 9,433 Additions that reduce net sales 67,944 55,047 Deductions from reserves (63,893 ) (50,074 ) Balance at end of period $ 19,313 $ 14,406 Warranty Liabilities The activity in the accrued warranty liabilities account was as follows (in thousands): Nine Months Ended October 3, September 27, Balance at beginning of year $ 5,824 $ 4,153 Additions charged to costs and expenses for current-year sales 7,514 6,119 Deductions from reserves (4,995 ) (5,434 ) Changes in liability for pre-existing warranties during the current year, including expirations 1,426 268 Balance at end of period $ 9,769 $ 5,106 Legal Proceedings We are involved from time to time in various legal proceedings arising in the ordinary course of our business, including primarily commercial, product liability, employment and intellectual property claims. In accordance with generally accepted accounting principles in the United States, we record a liability in our consolidated financial statements with respect to any of these matters when it is both probable that a liability has been incurred and the amount of the liability can be reasonably estimated. With respect to currently pending legal proceedings, we have not established an estimated range of reasonably possible additional losses either because we believe that we have valid defenses to claims asserted against us or the proceeding has not advanced to a stage of discovery that would enable us to establish an estimate. We currently do not expect the outcome of these matters to have a material effect on our consolidated results of operations, financial position or cash flows. Litigation, however, is inherently unpredictable, and it is possible that the ultimate outcome of one or more claims asserted against us could adversely impact our consolidated results of operations, financial position or cash flows. We expense legal costs as incurred.

Basis of Presentation (Policies

Basis of Presentation (Policies)	9 Months Ended
	Oct. 03, 2015
Accounting Policies [Abstract]
Business and Basis of Presentation, Policy	We prepared the condensed consolidated financial statements as of and for the three and nine months ended October 3, 2015 of Select Comfort Corporation and 100%-owned subsidiaries (Select Comfort or the Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and they reflect, in the opinion of management, all normal recurring adjustments necessary to present fairly our financial position as of October 3, 2015 , and January 3, 2015 , and the consolidated results of operations and cash flows for the periods presented. Our historical and quarterly consolidated results of operations may not be indicative of the results that may be achieved for the full year or any future period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with our most recent audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 3, 2015 and other recent filings with the SEC.
Use of Estimates, Policy	The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of sales, expenses and income taxes during the reporting period. Predicting future events is inherently an imprecise activity and, as such, requires the use of judgment. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates will be reflected in the financial statements in future periods. Our critical accounting policies consist of stock-based compensation, goodwill and indefinite-lived intangible assets, warranty liabilities and revenue recognition.
Consolidation, Policy	The condensed consolidated financial statements include the accounts of Select Comfort Corporation and our 100%-owned subsidiaries. All significant intra-entity balances and transactions have been eliminated in consolidation.
New Accounting Pronouncements, Policy	In May 2014, the Financial Accounting Standards Board (FASB) issued a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. This new guidance was originally effective for fiscal years beginning after December 15, 2016 and early adoption was not permitted. In July 2015, the FASB deferred the effective date from fiscal years beginning after December 15, 2016 to fiscal years beginning after December 15, 2017 (including interim reporting periods within those fiscal years). Early adoption is permitted to the original effective date of fiscal years beginning after December 15, 2016 (including interim reporting periods within those fiscal years). Companies may use either a full retrospective or a modified retrospective approach to adopt this new guidance. We are evaluating the effect of the new standard on our consolidated financial statements and related disclosures, and have not yet selected a transition method. In 2015, the FASB issued new guidance related to business combinations. The new guidance requires that adjustments made to provisional amounts recognized in a business combination be recorded in the period such adjustments are determined, rather than retrospectively adjusting previously reported amounts. The new guidance is effective for fiscal years, and interim reporting periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. We are evaluating the impact, if any, of adopting this new accounting guidance on our consolidated financial statements and related disclosures. We will adopt the new guidance in the first quarter of 2016.
Stockholders' Equity, Policy	There is no expiration date governing the period over which we can repurchase shares. Any repurchased shares are constructively retired and returned to an unissued status. The cost of share repurchases is first charged to additional paid-in capital. Once additional paid-in capital is reduced to zero, any additional amounts are charged to retained earnings.

Acquisition of BAM Labs, Inc. (

Acquisition of BAM Labs, Inc. (Tables)	9 Months Ended
	Oct. 03, 2015
Acquisition of BAM Labs, Inc. [Line Items]
Schedule of Business Acquisitions, by Acquisition [Table Text Block]	The following table summarizes the preliminary fair value of the net assets acquired as of October 3, 2015 (in thousands): Accounts receivable $ 104 Inventories 98 Prepaid expenses 98 Property and equipment 91 Deferred income taxes 954 Goodwill 56,201 Intangible assets 13,619 Total assets acquired 71,165 Accounts payable 267 Compensation and benefits 322 Other liabilities 558 Total liabilities acquired 1,147 Net assets acquired $ 70,018

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Oct. 03, 2015
Fair Value Disclosures [Abstract]
Assets and Liabilities that are Measured at Fair Value on a Recurring Basis	The following tables set forth by level within the fair value hierarchy, our financial assets that were accounted for at fair value on a recurring basis, according to the valuation techniques we used to determine their fair value (in thousands): October 3, 2015 Level 1 Level 2 Level 3 Total Marketable debt securities – current Corporate bonds $ — $ 12,597 $ — $ 12,597 Commercial paper — 9,993 — 9,993 Municipal bonds — 8,140 — 8,140 U.S. Agency bonds — 2,513 — 2,513 — 33,243 — 33,243 Marketable debt securities – non-current Corporate bonds — 5,013 — 5,013 U.S. Agency bonds — 2,498 — 2,498 Municipal bonds — 1,070 — 1,070 — 8,581 — 8,581 $ — $ 41,824 $ — $ 41,824 January 3, 2015 Level 1 Level 2 Level 3 Total Marketable debt securities – current U.S. Treasury securities $ 17,506 $ — $ — $ 17,506 Corporate bonds — 20,139 — 20,139 U.S. Agency bonds — 12,525 — 12,525 Commercial paper — 12,486 — 12,486 Municipal bonds — 6,953 — 6,953 17,506 52,103 — 69,609 Marketable debt securities – non-current U.S. Treasury securities 14,990 — — 14,990 Corporate bonds — 15,236 — 15,236 U.S. Agency bonds — 10,014 — 10,014 Municipal bonds — 4,201 — 4,201 14,990 29,451 — 44,441 $ 32,496 $ 81,554 $ — $ 114,050

Investments (Tables)

Investments (Tables)	9 Months Ended
	Oct. 03, 2015
Investments [Abstract]
Investments in marketable debt securities	Investments in marketable debt securities were comprised of the following (in thousands): October 3, 2015 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate bonds $ 17,612 $ 4 $ (6 ) $ 17,610 U.S. Agency bonds 4,998 13 — 5,011 Commercial paper 9,993 — — 9,993 Municipal bonds 9,209 2 (1 ) 9,210 $ 41,812 $ 19 $ (7 ) $ 41,824 January 3, 2015 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate bonds $ 35,409 $ 2 $ (36 ) $ 35,375 U.S. Treasury securities 32,507 12 (23 ) 32,496 U.S. Agency bonds 22,545 4 (10 ) 22,539 Commercial paper 12,487 — (1 ) 12,486 Municipal bonds 11,157 2 (5 ) 11,154 $ 114,105 $ 20 $ (75 ) $ 114,050
Maturities of marketable debt securities	Maturities of marketable debt securities were as follows (in thousands): October 3, 2015 January 3, 2015 Amortized Cost Fair Value Amortized Cost Fair Value Marketable debt securities – current (due in less than one year) $ 33,231 $ 33,243 $ 69,607 $ 69,609 Marketable debt securities – non-current (due in one to two years) 8,581 8,581 44,498 44,441 $ 41,812 $ 41,824 $ 114,105 $ 114,050

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Oct. 03, 2015
Inventory Disclosure [Abstract]
Inventories	Inventories consisted of the following (in thousands): October 3, January 3, Raw materials $ 13,558 $ 10,220 Work in progress 830 411 Finished goods 63,365 42,904 $ 77,753 $ 53,535

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	9 Months Ended
	Oct. 03, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Indefinite-Lived Intangible Assets	The following is a roll forward of goodwill and indefinite-lived trade name/trademarks (in thousands): Nine Months Ended Nine Months Ended October 3, 2015 September 27, 2014 Goodwill Indefinite-Lived Goodwill Indefinite-Lived Beginning balance $ 8,963 $ 1,396 $ 8,963 $ 1,396 BAM Labs acquisition 56,201 — — — Ending balance $ 65,164 $ 1,396 $ 8,963 $ 1,396
Definite-Lived Intangible Assets	The following table provides the gross carrying amount and related accumulated amortization of our definite-lived intangible assets (in thousands): October 3, 2015 January 3, 2015 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Developed technologies (1) $ 18,850 $ 1,796 $ 5,231 $ 1,342 Customer relationships 2,413 934 2,413 675 Trade names/trademarks 101 101 101 101 $ 21,364 $ 2,831 $ 7,745 $ 2,118 (1) In September 2015, in connection with the acquisition of BAM Labs, Inc., we acquired $13.6 million of definite-lived intangible assets consisting of developed technologies.

Repurchase of Common Stock (Tab

Repurchase of Common Stock (Tables)	9 Months Ended
	Oct. 03, 2015
Repurchase of Common Stock [Abstract]
Repurchase of Common Stock	Repurchases of our common stock were as follows (in thousands): Three Months Ended Nine Months Ended October 3, September 27, October 3, September 27, Amount repurchased under Board-approved share repurchase program $ 18,530 $ 10,010 $ 68,557 $ 30,032 Amount repurchased in connection with the vesting of employee restricted stock grants 140 — 1,743 1,448 Total amount repurchased $ 18,670 $ 10,010 $ 70,300 $ 31,480

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Oct. 03, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	Stock-based compensation expense consisted of the following (in thousands): Three Months Ended Nine Months Ended October 3, September 27, October 3, September 27, Options $ 668 $ 574 $ 1,984 $ 1,503 Restricted shares 2,456 1,685 6,968 2,791 Total stock-based compensation expense (1) 3,124 2,259 8,952 4,294 Income tax benefit 904 768 2,909 1,464 Total stock-based compensation expense, net of tax $ 2,220 $ 1,491 $ 6,043 $ 2,830 (1) The nine months ended September 27, 2014 includes a $1.2 million benefit related to a change in estimated forfeitures due to employee turnover during the three months ended March 29, 2014.

Other Income, Net (Tables)

Other Income, Net (Tables)	9 Months Ended
	Oct. 03, 2015
Other Income and Expenses [Abstract]
Other Income, Net	Other income, net, consisted of the following (in thousands): Three Months Ended Nine Months Ended October 3, September 27, October 3, September 27, Interest income $ 122 $ 106 $ 428 $ 306 Interest expense (44 ) (10 ) (64 ) (30 ) Other income, net $ 78 $ 96 $ 364 $ 276

Net Income Per Common Share (Ta

Net Income Per Common Share (Tables)	9 Months Ended
	Oct. 03, 2015
Earnings Per Share [Abstract]
Net Income per Common Share	The components of basic and diluted net income per share were as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended October 3, September 27, October 3, September 27, Net income $ 31,854 $ 23,554 $ 71,691 $ 49,027 Reconciliation of weighted-average shares outstanding: Basic weighted-average shares outstanding 50,945 53,271 51,654 53,677 Dilutive effect of stock-based awards 756 700 870 681 Diluted weighted-average shares outstanding 51,701 53,971 52,524 54,358 Net income per share – basic $ 0.63 $ 0.44 $ 1.39 $ 0.91 Net income per share – diluted $ 0.62 $ 0.44 $ 1.36 $ 0.90

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Oct. 03, 2015
Commitments and Contingencies Disclosure [Abstract]
Sales Returns	The activity in the sales returns liability account was as follows (in thousands): Nine Months Ended October 3, September 27, Balance at beginning of year $ 15,262 $ 9,433 Additions that reduce net sales 67,944 55,047 Deductions from reserves (63,893 ) (50,074 ) Balance at end of period $ 19,313 $ 14,406
Warranty Liabilities	The activity in the accrued warranty liabilities account was as follows (in thousands): Nine Months Ended October 3, September 27, Balance at beginning of year $ 5,824 $ 4,153 Additions charged to costs and expenses for current-year sales 7,514 6,119 Deductions from reserves (4,995 ) (5,434 ) Changes in liability for pre-existing warranties during the current year, including expirations 1,426 268 Balance at end of period $ 9,769 $ 5,106

Acquisition of BAM Labs, Inc. -

Acquisition of BAM Labs, Inc. - Purchase Price Allocation (Details) - USD ($) $ in Thousands	Sep. 09, 2015	Oct. 03, 2015	Sep. 27, 2014	Jan. 03, 2015	Dec. 28, 2013
Acquisition of BAM Labs, Inc. [Line Items]
Name of acquired entity	BAM Labs, Inc.
Description of acquired entity	the leading provider of biometric sensor and sleep monitoring for data-driven health and wellness
Reason for acquisition	The addition of BAM Labs strengthens Sleep Number’s leadership in sleep innovation, adjustability and individualization. The acquisition broadens and deepens electrical, biomedical, software and backend capabilities - API (application program interface) and bio-signal analysis. Our ownership and control of biometric data advances smart, connected products that empower our customers to ‘know better sleep.’
Remeasured fair value - equity investment	$ 12,900
Cash payment - remaining capital stock	57,100
Net assets acquired		$ 70,018	$ 0
Acquisition of BAM Labs, Inc. Purchase Price Allocation
Goodwill		65,164	$ 8,963	$ 8,963	$ 8,963
BAM Labs, Inc. [Member]
Acquisition of BAM Labs, Inc. [Line Items]
Net assets acquired		$ 70,000
Acquisition of BAM Labs, Inc. Purchase Price Allocation
Accounts receivable	104
Inventory	98
Other current assets	98
Property and equipment	91
Deferred income taxes	954
Goodwill	56,201
Intangible Assets	13,619
Total assets acquired	71,165
Accounts Payable	267
Other current liabilities	322
Other liabilities	558
Total liabilities acquired	1,147
Net assets acquired	70,018
Other Noncurrent Assets [Member]
Acquisition of BAM Labs, Inc. [Line Items]
Equity investment original cost	$ 6,000

Acquisition of BAM Labs, Inc.33

Acquisition of BAM Labs, Inc. - Acquired Intangible Assets (Details) - USD ($) $ in Millions	Sep. 09, 2015	Oct. 03, 2015
Acquisition of BAM Labs, Inc. [Line Items]
Definite-lived intangible assets tax deductibility period	15 years
Developed Technology Rights [Member] | BAM Labs, Inc. [Member]
Acquisition of BAM Labs, Inc. [Line Items]
Purchased intangible assets	$ 13.6
Estimated useful life		8 years

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Recurring [Member] - USD ($) $ in Thousands	Oct. 03, 2015	Jan. 03, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	$ 33,243	$ 69,609
Marketable debt securities - noncurrent	8,581	44,441
Marketable debt securities	41,824	114,050
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	0	17,506
Marketable debt securities - noncurrent	0	14,990
Marketable debt securities	0	32,496
Deferred compensation plan liability	1,500	1,000
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	33,243	52,103
Marketable debt securities - noncurrent	8,581	29,451
Marketable debt securities	41,824	81,554
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	0	0
Marketable debt securities - noncurrent	0	0
Marketable debt securities	0	0
Available-for-sale Securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities assets funding the deferred compensation plan	1,500	1,000
US Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current		17,506
Marketable debt securities - noncurrent		14,990
US Treasury Securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current		17,506
Marketable debt securities - noncurrent		14,990
US Treasury Securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current		0
Marketable debt securities - noncurrent		0
US Treasury Securities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current		0
Marketable debt securities - noncurrent		0
Corporate bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	12,597	20,139
Marketable debt securities - noncurrent	5,013	15,236
Corporate bonds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	0	0
Marketable debt securities - noncurrent	0	0
Corporate bonds [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	12,597	20,139
Marketable debt securities - noncurrent	5,013	15,236
Corporate bonds [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	0	0
Marketable debt securities - noncurrent	0	0
U.S. Agency bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	2,513	12,525
Marketable debt securities - noncurrent	2,498	10,014
U.S. Agency bonds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	0	0
Marketable debt securities - noncurrent	0	0
U.S. Agency bonds [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	2,513	12,525
Marketable debt securities - noncurrent	2,498	10,014
U.S. Agency bonds [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	0	0
Marketable debt securities - noncurrent	0	0
Municipal bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	8,140	6,953
Marketable debt securities - noncurrent	1,070	4,201
Municipal bonds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	0	0
Marketable debt securities - noncurrent	0	0
Municipal bonds [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	8,140	6,953
Marketable debt securities - noncurrent	1,070	4,201
Municipal bonds [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	0	0
Marketable debt securities - noncurrent	0	0
Commercial Paper, Not Included with Cash and Cash Equivalents [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	9,993	12,486
Commercial Paper, Not Included with Cash and Cash Equivalents [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	0	0
Commercial Paper, Not Included with Cash and Cash Equivalents [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	9,993	12,486
Commercial Paper, Not Included with Cash and Cash Equivalents [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable debt securities - current	$ 0	$ 0

Investments - Marketable Debt S

Investments - Marketable Debt Securities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014	Jan. 03, 2015
Investments of marketable debt securities [Abstract]
Marketable debt securities Total Amortized Cost	$ 41,812		$ 41,812		$ 114,105
Unrealized gains	19		19		20
Unrealized losses	(7)		(7)		(75)
Fair value	41,824		41,824		114,050
Amortized Cost [Abstract]
Marketable debt securities - current (due in less than one year)	33,231		33,231		69,607
Marketable debt securities - non-current (due in one to two years)	8,581		8,581		44,498
Marketable debt securities Total Amortized Cost	41,812		41,812		114,105
Fair Value [Abstract]
Marketable debt securities - current (due in less than one year)	33,243		33,243		69,609
Marketable debt securities - non-current (due in one to two years)	8,581		8,581		44,441
Fair value	41,824		41,824		114,050
Proceeds from marketable debt securities	59,200	$ 14,600	101,000	$ 38,100
U.S. Treasury securities [Member]
Investments of marketable debt securities [Abstract]
Marketable debt securities Total Amortized Cost					32,507
Unrealized gains					12
Unrealized losses					(23)
Fair value					32,496
Amortized Cost [Abstract]
Marketable debt securities Total Amortized Cost					32,507
Fair Value [Abstract]
Fair value					32,496
Corporate bonds [Member]
Investments of marketable debt securities [Abstract]
Marketable debt securities Total Amortized Cost	17,612		17,612		35,409
Unrealized gains	4		4		2
Unrealized losses	(6)		(6)		(36)
Fair value	17,610		17,610		35,375
Amortized Cost [Abstract]
Marketable debt securities Total Amortized Cost	17,612		17,612		35,409
Fair Value [Abstract]
Fair value	17,610		17,610		35,375
U.S. Agency bonds [Member]
Investments of marketable debt securities [Abstract]
Marketable debt securities Total Amortized Cost	4,998		4,998		22,545
Unrealized gains	13		13		4
Unrealized losses	0		0		(10)
Fair value	5,011		5,011		22,539
Amortized Cost [Abstract]
Marketable debt securities Total Amortized Cost	4,998		4,998		22,545
Fair Value [Abstract]
Fair value	5,011		5,011		22,539
Commercial Paper, Not Included with Cash and Cash Equivalents [Member]
Investments of marketable debt securities [Abstract]
Marketable debt securities Total Amortized Cost	9,993		9,993		12,487
Unrealized gains	0		0		0
Unrealized losses	0		0		(1)
Fair value	9,993		9,993		12,486
Amortized Cost [Abstract]
Marketable debt securities Total Amortized Cost	9,993		9,993		12,487
Fair Value [Abstract]
Fair value	9,993		9,993		12,486
Municipal bonds [Member]
Investments of marketable debt securities [Abstract]
Marketable debt securities Total Amortized Cost	9,209		9,209		11,157
Unrealized gains	2		2		2
Unrealized losses	(1)		(1)		(5)
Fair value	9,210		9,210		11,154
Amortized Cost [Abstract]
Marketable debt securities Total Amortized Cost	9,209		9,209		11,157
Fair Value [Abstract]
Fair value	$ 9,210		$ 9,210		$ 11,154

Investments - Other Investments

Investments - Other Investments (Details) - USD ($) $ in Millions	Sep. 09, 2015	Oct. 03, 2015	Oct. 03, 2015
Remeasured fair value - equity investment	$ 12.9
Remeasurement gain, net of acquisition costs and incremental R&D expenses		$ 3	$ 3
Other Noncurrent Assets [Member]
Equity investment original cost	$ 6
General and Administrative Expense [Member]
Remeasurement gain, net of acquisition costs		3.5	3.5
Acquisition Related Costs		3.4	3.4
Research and Development Expense [Member]
Incremental research and development expense		$ 0.5	$ 0.5

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Oct. 03, 2015	Jan. 03, 2015
Inventory Disclosure [Abstract]
Raw materials	$ 13,558	$ 10,220
Work in progress	830	411
Finished goods	63,365	42,904
Inventories	$ 77,753	$ 53,535

Goodwill and Intangible Asset38

Goodwill and Intangible Assets Goodwill and Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014
Indefinite-lived Intangible Assets [Roll Forward]
Indefinite-lived tradename/trademarks	$ 1,396	$ 1,396
BAM Labs acquisition	0	0
Indefinite-lived tradename/trademarks	1,396	1,396
Goodwill [Roll Forward]
Goodwill	8,963	8,963
BAM Labs acquisition	56,201	0
Goodwill	$ 65,164	$ 8,963

Goodwill and Intangible Asset39

Goodwill and Intangible Assets Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 09, 2015	Oct. 03, 2015		Jan. 03, 2015
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets		$ 21,364		$ 7,745
Finite-Lived Intangible Assets, Accumulated Amortization		2,831		2,118
Developed technologies [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets		18,850	[1]	5,231
Finite-Lived Intangible Assets, Accumulated Amortization		1,796		1,342
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets		2,413		2,413
Finite-Lived Intangible Assets, Accumulated Amortization		934		675
Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets		101		101
Finite-Lived Intangible Assets, Accumulated Amortization		$ 101		$ 101
BAM Labs, Inc. [Member] | Developed Technology Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Purchased intangible assets	$ 13,600
[1]	In September 2015, in connection with the acquisition of BAM Labs, Inc., we acquired $13.6 million of definite-lived intangible assets consisting of developed technologies.

Goodwill and Intangible Asset40

Goodwill and Intangible Assets Amortization Expense and Future Amortization Expense (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014
Finite-Lived Intangible Assets [Line Items]
Amortization expense definite-lived intangible assets	$ 0.3	$ 0.2	$ 0.7	$ 0.6
2,016	2.5		2.5
2,017	2.5		2.5
2,018	2.5		2.5
2,019	2.5		2.5
2,020	$ 2.2		$ 2.2

Credit Agreement (Details)

Credit Agreement (Details) $ in Millions	9 Months Ended
	Oct. 03, 2015USD ($)
Keybank National Association [Member]
Line of Credit Facility [Line Items]
Current borrowing capacity	$ 100
Maximum Borrowing Capacity	$ 150
Line of Credit Facility, Expiration Date	Sep. 9, 2020
Amended Credit Facility, Wells Fargo Bank [Member]
Line of Credit Facility [Line Items]
Current borrowing capacity	$ 20
Line of Credit Facility Amended Expiration Date	Aug. 31, 2016

Repurchase of Common Stock (Det

Repurchase of Common Stock (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014
Repurchase of Common Stock [Abstract]
Amount repurchased under Board-approved share repurchase program	$ 18,530	$ 10,010	$ 68,557	$ 30,032
Stock repurchased through tax withholding on restricted stock	140	0	1,743	1,448
Total amount repurchased	18,670	$ 10,010	70,300	$ 31,480
Remaining Authorized Amount, Stock Repurchase Program	$ 166,000		$ 166,000

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014
Total stock-based compensation expense	$ 3,124	$ 2,259	$ 8,952	$ 4,294	[1]
Income tax benefit	904	768	2,909	1,464
Total stock-based compensation expense, net of tax	2,220	1,491	6,043	2,830
Employee Service Share-based Compensation, Expense (Benefit) of Change in Forfeiture Rate				(1,200)
Stock Options [Member]
Total stock-based compensation expense	668	574	1,984	1,503
Time-Based, Performance-Based and Market-Based Stock Awards [Member]
Total stock-based compensation expense	$ 2,456	$ 1,685	$ 6,968	$ 2,791
[1]	The nine months ended September 27, 2014 includes a $1.2 million benefit related to a change in estimated forfeitures due to employee turnover during the three months ended March 29, 2014.

Employee Benefits (Details)

Employee Benefits (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014
Profit Sharing and 401 (k) Plan [Abstract]
Employee compensation deferral (in hundredths)			50.00%
Employer contributions	$ 1.3	$ 0.9	$ 3.3	$ 2.7

Other Income, Net (Details)

Other Income, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014
Other Income and Expenses [Abstract]
Interest income	$ 122	$ 106	$ 428	$ 306
Interest expense	(44)	(10)	(64)	(30)
Other income, net	$ 78	$ 96	$ 364	$ 276

Net Income per Common Share (De

Net Income per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014	Oct. 03, 2015	Sep. 27, 2014
Net Income per Common Share [Abstract]
Net income	$ 31,854	$ 23,554	$ 71,691	$ 49,027
Basic weighted-average shares outstanding	50,945,000	53,271,000	51,654,000	53,677,000
Effect of dilutive securities	756,000	700,000	870,000	681,000
Diluted weighted-average shares outstanding	51,701,000	53,971,000	52,524,000	54,358,000
Net income per share – basic (in USD per share)	$ 0.63	$ 0.44	$ 1.39	$ 0.91
Net income per share – diluted (in USD per share)	$ 0.62	$ 0.44	$ 1.36	$ 0.90

Commitments and Contingencies S

Commitments and Contingencies Sales Return Liability (Details) - USD ($) $ in Thousands	9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014
Sales return liability [Roll Forward]
Balance at beginning of year	$ 15,262	$ 9,433
Additions that reduce net sales	67,944	55,047
Deductions from reserves	(63,893)	(50,074)
Balance at end of period	$ 19,313	$ 14,406

Commitments and Contingencies W

Commitments and Contingencies Warranty Liabilities (Details) - USD ($) $ in Thousands	9 Months Ended
	Oct. 03, 2015	Sep. 27, 2014
Warranty Liabilities [Roll Forward]
Balance at beginning of year	$ 5,824	$ 4,153
Additions charged to costs and expenses for current-year sales	7,514	6,119
Deductions from reserves	(4,995)	(5,434)
Changes in liability for pre-existing warranties during the current year, including expirations	1,426	268
Balance at end of period	$ 9,769	$ 5,106