EXHIBIT 99.1
FOR IMMEDIATE RELEASE CONTACT: Mark Kimball (763) 551-7070
Select Comfort Corporation
mark.kimball@selectcomfort.com
SELECT COMFORT ANNOUNCES RECORD FOURTH QUARTER SALES
SAME-STORE SALES INCREASE 28 PERCENT IN QUARTER
MINNEAPOLIS, MINN. (January 8, 2004) - Select Comfort Corporation (NASDAQ:
SCSS), the nation's leading bed retailer and creator of the Sleep Number(R) bed,
today announced preliminary fourth quarter 2003 net sales of $137 million, a
record for the company and an increase of 49 percent over the fourth quarter of
2002. For the quarter, same-store sales increased 28 percent, on top of a 38
percent same-store sales increase in fourth quarter 2002.(1) The company expects
to report its 10th consecutive quarterly profit with earnings in the range of
$0.26 to $0.28 per diluted share, compared to pro forma (after tax) earnings per
diluted share of $0.15 in the fourth quarter of 2002.
For fiscal 2003, Select Comfort reported preliminary net sales of $458
million, 36 percent higher than 2002 net sales of $336 million. Management
expects to report annual earnings in the range of $0.67 to $0.69 per fully
diluted share for 2003, compared to pro forma earnings per diluted share of
$0.37 in 2002.
"We are pleased with our fourth quarter sales growth, a result of
consumers continuing to discover the benefits of personalized comfort on a Sleep
Number bed," said Bill McLaughlin, president and chief executive officer. "In
2004, our focus is on sustaining our core business growth through investment in
advertising and product innovation while strategically expanding distribution."
The company's earnings under Generally Accepted Accounting Principles
(GAAP) for fourth quarter 2003 are being compared to 2002 earnings on a pro
forma, after-tax basis to improve comparability between the periods. GAAP did
not allow the company to reduce its earnings for income tax expense in 2002,
while 2003 results reflect a reduction in earnings for income taxes. In the
fourth quarter of 2002, pro forma earnings per diluted share were $0.15 and
reported earnings per diluted share under GAAP were $0.21. A full reconciliation
of the company's pro forma, after-tax earnings per diluted share for 2002 to
treatment under GAAP can be found at the end of this release.
1
Select Comfort plans to announce full results for fourth quarter and
2003, as well as provide quarterly expectations for 2004, after market close on
February 10, 2004. The company will also hold a conference call to discuss its
fourth quarter and year-end results on February 10, 2004, at 4:00 p.m. Central
Time. A simultaneous webcast of the call will be available in the Investor
Relations section of www.selectcomfort.com. A digital replay of the conference
call will be accessible beginning at approximately 6:00 p.m. Central Time on
February 10, 2004, through 5:00 p.m. Central Time on February 17, 2004. To
access the replay, please call 402-220-3572 (U.S. and International). An
archived replay of the conference call may also be accessed after approximately
7:00 p.m. Central Time on February 10, 2004 at www.selectcomfort.com.
ABOUT SELECT COMFORT
Founded in 1987, Select Comfort Corporation is the nation's leading bed
retailer(2), holding 26 U.S. issued or pending patents for its personalized
sleep products. The company designs, manufactures and markets a line of
adjustable-firmness mattresses featuring air-chamber technology, branded the
Sleep Number(R) bed, as well as foundations and sleep accessories. Select
Comfort's products are sold through its 344 retail stores located nationwide,
including 13 leased departments in Bed Bath & Beyond stores; through selected
bedding retailers; through its national direct marketing operations; and on the
Internet at www.selectcomfort.com.
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Statements used in this press release that relate to future plans, events,
financial results or performance are forward-looking statements that are subject
to certain risks and uncertainties including, among others, such factors as
general and industry economic trends, uncertainties arising from global events,
consumer confidence, effectiveness of our advertising and promotional efforts,
our ability to secure suitable retail locations, our ability to attract and
retain qualified sales professionals and other key employees, consumer
acceptance of our products and product innovation, our ability to continue to
expand and improve our product line, industry competition, warranty expenses,
California wage and hour litigation, our dependence on significant suppliers,
and the vulnerability of any suppliers to recessionary pressures, labor
negotiations, liquidity concerns or other factors, increasing government
regulations, including possible new flammability standards for the bedding
industry, as well as the risk factors listed 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.
2
The company has no obligation to publicly update or revise any of the
forward-looking statements that may be in this news release.
(1) Fiscal fourth quarter 2003 includes 14 weeks, as compared to 13 weeks in
fiscal fourth quarter of 2002. Same-store sales have been adjusted and
reported as if both years had the same number of weeks.
(2) Top 25 Bedding Retailers, Furniture Today, May 26, 2003
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SELECT COMFORT PRO FORMA EARNINGS PER DILUTED SHARE RECONCILIATION
Reconciliation of the company's estimates of pro forma earnings per diluted
share under Generally Accepted Accounting Principles (GAAP) for the fourth
quarter of 2002 and full-year 2002 are as follows:
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THREE MONTHS
ENDED FULL YEAR
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RECONCILIATION OF GAAP EARNINGS PER DILUTED SHARE TO PRO FORMA
EARNINGS PER DILUTED SHARE 12/28/02 12/28/02
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GAAP earnings per diluted share $ 0.21 $ 1.09
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Effect of:
Income tax provision at 38% of income before tax $(0.09) (0.22)
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Charges from early repayment of debt $ 0.02 0.02
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Restoration of deferred tax asset and other income tax items $ 0.01 (0.52)
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Pro forma earnings per diluted share $ 0.15 $ 0.37
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