UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): FEBRUARY 5, 2001
SELECT COMFORT CORPORATION
(Exact name of registrant as specified in its charter)
MINNESOTA 0-25121 41-1597886
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
6105 TRENTON LANE NORTH
MINNEAPOLIS, MINNESOTA 55442
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (763) 551-7000
ITEM 5. OTHER EVENTS.
On February 5, 2001, the registrant issued a press release regarding its
results for the fourth quarter ended December 30, 2000, as follows:
SELECT COMFORT CORPORATION
COMMENTS ON FOURTH QUARTER RESULTS
MINNEAPOLIS, MINN. (February 5, 2001) - Select Comfort Corporation (NASDAQ:
SCSS) announced that it expects to report a net loss of $0.22 per share for the
fourth quarter ended December 30, 2000. The fourth quarter results include
approximately $500,000 of non-cash charges associated with store asset
write-downs. The company expects to report full results for the quarter and
fiscal year during the week of February 19, 2001.
Bill McLaughlin, president and chief executive officer, said, "With the
weakening economy, we experienced softness in sales, particularly late in the
holiday retail season, when we historically have benefited from heavy mall
traffic. Although we are disappointed with the results for the fourth quarter,
we continue to make progress on key initiatives that will drive our operating
plan for 2001. Specifically, we recently improved our cost structure by
consolidating all of our corporate personnel in our Plymouth, Minn., facility,
and by streamlining our selling organization. In addition, other cost-reduction
measures taken during 2000, including reductions in corporate staff, closure of
27 under-performing stores, elimination of the South Carolina call center,
rebalancing of manufacturing capability and tightening of discounts and
promotional spending, will provide full-year benefits in 2001. In total, cost
saving programs initiated since the beginning of 2000 represent an improvement
in our annual run rate of approximately $15 million. We also made progress in
testing distribution outside our company stores through successful initiatives
with Gabberts and on QVC."
The company also announced that it is in the process of arranging debt
financing to bolster working capital and to support growth initiatives for 2001.
The company has been working with a lending source and expects to finalize
financing in the near term. Pat Hopf, chairman of the Select Comfort board of
directors and president of St. Paul Venture Capital, which owns over 34% of the
company's stock, said, "We are encouraged by the company's direction and
progress toward profitability. We continue to support the company, and we
endorse its action to secure standard working capital financing."
In other news, the company reported the launch of a major marketing
initiative to reposition the company's product, brand and marketing messages
around the company's SLEEP NUMBER(R) bed. This company-wide repositioning, which
includes the company's first network television advertising campaign, began its
rollout to initial markets in January and to the company's lead markets in
February.
"Strong marketing programs designed to increase brand awareness, to
highlight our unique product benefits, and to drive traffic to our retail stores
are critical to Select Comfort's success in 2001 and beyond," said Noel
Schenker, senior vice president of marketing and new business development.
"Despite our large customer base, and extraordinary satisfaction ratings and
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referrals, lack of awareness among the broad consumer audience has been our
number one barrier to sales growth. The Sleep Number advertising campaign has
driven a significant increase in awareness and store traffic in our early pilot
markets. Consequently, this week we are expanding the campaign to six of our
strongest markets, and have identified other markets for subsequent rollout.
Importantly, this initiative does not represent an increase in marketing
spending rate, rather a refocusing of marketing investment to broad-reach,
high-impact programs."
In conjunction with the launch of the Sleep Number campaign, the company
announced at a January 30 press conference in New York that it had formed a
charitable partnership with Ronald McDonald Houses. These houses serve as a
"home-away-from-home" for thousands of families with critically ill children
receiving treatment at nearby hospitals. The partnership began with the donation
of one bed to each of the 144 Ronald McDonald Houses across the country, with a
long-term objective to provide a bed for each Ronald McDonald House bedroom,
providing all of their guests with the best night's sleep possible.
Founded in 1987, Select Comfort Corporation is the leader in sleep solutions
technology, holding 24 U.S. issued or pending patents for its products. The
company designs, manufactures and markets a line of mattresses with adjustable
firmness, as well as foundations and sleep accessories. Select Comfort's
products are sold through three channels: i) 330 retail stores located
nationwide, including 25 leased departments in Bed Bath & Beyond stores, ii)
Select Comfort's national direct sales operations, and iii) on the Internet at
www.selectcomfort.com.
Statements used in this press release that relate to future plans, events,
financial results or performance are forward-looking statements as defined under
the Private Securities Litigation Reform Act of 1995. Actual plans, events,
results and performance may differ materially from those anticipated as a result
of certain risks and uncertainties, including but not limited to:
o The company's ability to create product and brand name awareness.
o The efficiency and effectiveness of the company's marketing and advertising.
o The ability of the company to effectively and efficiently pursue new
channels of distribution.
o The performance of the company's existing and new stores.
o The ability of the company to realize the benefits of cost saving
initiatives.
o The levels of consumer acceptance of the company's product lines.
o The ability of the company to continuously improve its existing product
lines and introduce new products.
o The ability of the company to efficiently implement nationwide home delivery
and assembly.
o The ability of the company to secure adequate working capital to support
growth initiatives.
o Economic trends and consumer confidence.
o Industry competition.
o The ability of the company to effectively integrate the operations of
SleepTec, including the maintenance and integration of an effective and
efficient supply chain for the sofa sleeper product line.
o The risks and uncertainties detailed from time to time in the company's
filings with the SEC, including the company's Annual Report on Form 10-K and
other periodic reports filed with the SEC.
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The company has no obligation to publicly update or revise any of the
forward-looking statements that may be in this news release.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SELECT COMFORT CORPORATION
(Registrant)
Dated: February 5, 2001 By /s/ Mark A. Kimball
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Title: Senior Vice President
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