(Graphic: Business Wire)

The following table contains a reconciliation of our net income determined in accordance with U.S. GAAP to EBITDA and Adjusted EBITDA for the periods indicated (in thousands):

				Thirteen Weeks Ended										Thirty-Nine Weeks Ended
				November 1,					October 30,					November 1,					October 30
					2011					2012					2011					2012
	Net income			$	12,314				$	12,456				$	16,979				$	32,277
	Income tax expense				551					8,484					870					19,972
	Interest income				(1	)				-					(4	)				(1	)
	Interest expense				8,530					2,097					25,479					6,386
	Depreciation and amortization				4,234					6,257					12,951					16,432
	Intangible assets and other amortization				439					(215	)				1,254					972
	EBITDA				26,067					29,079					57,529					76,038
	Loss on store closings and impairment of store assets				285					196					324					267
	Loss from debt extinguishment				-					-					1,873					-
	Financial sponsor fees and expenses				102					12					294					63
	Stock-based compensation				19					651					58					1,653
	Secondary offering costs				-					1,935					-					1,935
	Vendor new store funds (a)				473					304					773					937
	Acquisition related expenses (b)				70					3,025					178					10,074
	Other (c)				242					(132	)				924					(896	)
	Adjusted EBITDA			$	27,258				$	35,070				$	61,953				$	90,071

	(a)			Adjustment to recognize vendor funds received upon the opening of a new store in the period opened, rather than over 36-months as presented in our financial statements, which is consistent with how management has historically reviewed its results of operations.
	(b)			Noncash effect included in net income related to purchase accounting adjustments made to inventories resulting from acquisitions and other acquisition-related cash costs included in net income, such as direct acquisition costs and costs related to training and integration of acquired businesses.
	(c)			Consists of various items that management excludes in reviewing the results of operations.

As Adjusted EPS and the other “As Adjusted” data provided in this press release are also considered non-GAAP financial measures. For more information, please refer to “Reported to Adjusted Statements of Operations Data” below.

MATTRESS FIRM HOLDING CORP. Consolidated Balance Sheets (In thousands, except share amounts)
							January 31,					October 30,
								2012					2012
Assets												(unaudited)
Current assets:
Cash and cash equivalents							$	47,946				$	10,855
Accounts receivable, net								18,607					28,187
Inventories								40,961					62,181
Deferred income taxes								12,574					6,357
Prepaid expenses and other current assets								12,054					15,715
Total current assets								132,142					123,295
Property and equipment, net								95,674					133,905
Intangible assets, net								84,795					91,206
Goodwill								291,141					345,423
Debt issue costs and other, net								9,729					10,839
Total assets							$	613,481				$	704,668
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable and current maturities of long-term debt							$	2,414				$	6,953
Accounts payable								42,396					76,952
Accrued liabilities								31,780					41,447
Customer deposits								6,294					8,290
Total current liabilities								82,884					133,642
Long-term debt, net of current maturities								225,940					225,630
Deferred income taxes								31,045					25,840
Other noncurrent liabilities								49,353					61,367
Total liabilities								389,222					446,479
Stockholders' equity:
Common stock, $0.01 par value; 120,000,000 shares authorized;
33,768,828 shares issued and outstanding at
January 31, 2012 and October 30, 2012								338					338
Additional paid-in capital								361,717					363,370
Accumulated deficit								(137,796	)				(105,519	)
Total stockholders' equity								224,259					258,189
Total liabilities and stockholders' equity							$	613,481				$	704,668

MATTRESS FIRM HOLDING CORP. Consolidated Statements of Operations (In thousands, except share and per share amounts)
								Thirteen Weeks Ended																	Thirty-Nine Weeks Ended
								November 1,					% of				October 30,				% of				November 1,					% of				October 30,					% of
									2011				Sales				2012				Sales					2011				Sales					2012				Sales
Net sales								$	183,514				100	%			$	277,259			100	%			$	515,352				100	%			$	749,091				100	%
Cost of sales									110,106				60.0	%				167,173			60.3	%				315,333				61.2	%				454,299				60.6	%
Gross profit from retail operations									73,408				40.0	%				110,086			39.7	%				200,019				38.8	%				294,792				39.4	%
Franchise fees and royalty income									1,329				0.7	%				1,490			0.5	%				3,401				0.7	%				4,022				0.5	%
									74,737				40.7	%				111,576			40.2	%				203,420				39.5	%				298,814				39.9	%
Operating expenses:
Sales and marketing expenses									41,420				22.6	%				67,475			24.3	%				122,138				23.7	%				183,167				24.5	%
General and administrative expenses									11,638				6.3	%				20,868			7.5	%				35,761				6.9	%				56,746				7.6	%
Loss on store closings and impairment of store assets									285				0.2	%				196			0.1	%				324				0.1	%				267				0.0	%
Total operating expenses									53,343				29.1	%				88,539			31.9	%				158,223				30.7	%				240,180				32.1	%
Income from operations									21,394				11.7	%				23,037			8.3	%				45,197				8.8	%				58,634				7.8	%
Other expense (income):
Interest income									(1	)			0.0	%				-			0.0	%				(4	)			0.0	%				(1	)			0.0	%
Interest expense									8,530				4.6	%				2,097			0.8	%				25,479				4.9	%				6,386				0.9	%
Loss from debt extinguishment									-				0.0	%				-			0.0	%				1,873				0.4	%				-				0.0	%
									8,529				4.6	%				2,097			0.8	%				27,348				5.3	%				6,385				0.9	%
Income before income taxes									12,865				7.0	%				20,940			7.6	%				17,849				3.5	%				52,249				7.0	%
Income tax expense									551				0.3	%				8,484			3.1	%				870				0.2	%				19,972				2.7	%
Net income								$	12,314				6.7	%			$	12,456			4.5	%			$	16,979				3.3	%			$	32,277				4.3	%
Basic net income per common share								$	0.55								$	0.37							$	0.76								$	0.96
Diluted net income per common share								$	0.55								$	0.37							$	0.76								$	0.95
Reconciliation of weighted-average shares outstanding:
Basic weighted average shares outstanding									22,399,952									33,768,828								22,399,952									33,768,828
Effect of dilutive securities:
Stock options									-									93,907								-									113,592
Restricted shares									-									4,773								-									2,742
Diluted weighted average shares outstanding									22,399,952									33,867,508								22,399,952									33,885,162

MATTRESS FIRM HOLDING CORP. Consolidated Statements of Cash Flows (In thousands)
									Thirty-Nine Weeks Ended
									November 1,					October 30,
Cash flows from operating activities:										2011					2012
Net income									$	16,979				$	32,277
Adjustments to reconcile net income to cash flows
provided by operating activities:
Depreciation and amortization										12,951					16,432
Interest expense accrued and paid-in-kind										18,872					-
Loan fee and other amortization										1,911					1,855
Loss from debt extinguishment										1,873					-
Deferred income tax expense										-					8,613
Stock-based compensation										58					1,653
Loss on store closings and impairment of store assets										324					267
Effects of changes in operating assets and liabilities,
excluding business acquisitions:
Accounts receivable										(3,389	)				(6,887	)
Inventories										(8,136	)				(15,219	)
Prepaid expenses and other current assets										256					(647	)
Other assets										(2,476	)				(904	)
Accounts payable										9,531					22,138
Accrued liabilities										4,780					1,837
Customer deposits										933					134
Other noncurrent liabilities										3,250					4,906
Net cash provided by operating activities										57,717					66,455
Cash flows from investing activities:
Purchases of property and equipment										(22,192	)				(50,726	)
Business acquisitions, net of cash acquired										(100	)				(51,613	)
Net cash used in investing activities										(22,292	)				(102,339	)
Cash flows from financing activities:
Proceeds from issuance of debt										40,198					18,000
Principal payments of debt										(51,248	)				(19,207	)
Debt issuance costs										(1,273	)				-
Net cash used in financing activities										(12,323	)				(1,207	)
Net increase (decrease) in cash and cash equivalents										23,102					(37,091	)
Cash and cash equivalents, beginning of period										4,445					47,946
Cash and cash equivalents, end of period									$	27,547				$	10,855

MATTRESS FIRM HOLDING CORP. Reported to Adjusted Statements of Operations Data (In thousands, except share and per share amounts)
						Thirteen Weeks Ended
						November 1, 2011				October 30, 2012
														Acquisition-				Secondary
														Related				Offering
						As Reported				As Reported				Costs (1)				Costs (2)				As Adjusted
Income from operations						$	21,394			$	23,037			$	3,025			$	1,935			$	27,997
Other expense, net							8,529				2,097				-				-				2,097
Income before income taxes							12,865				20,940				3,025				1,935				25,900
Income tax expense (3)							551				8,484				1,175				492				10,151
Net income						$	12,314			$	12,456			$	1,850			$	1,443			$	15,749
Basic net income per common share *						$	0.55			$	0.37			$	0.05			$	0.04			$	0.47
Diluted net income per common share *						$	0.55			$	0.37			$	0.05			$	0.04			$	0.47
Basic weighted average shares outstanding							22,399,952				33,768,828				33,768,828				33,768,828				33,768,828
Diluted weighted average shares outstanding							22,399,952				33,867,508				33,867,508				33,867,508				33,867,508
						Thirty-Nine Weeks Ended
						November 1, 2011				October 30, 2012
														Acquisition-				Secondary
														Related				Offering
						As Reported				As Reported				Costs (1)				Costs (2)				As Adjusted
Income from operations						$	45,197			$	58,634			$	10,074			$	1,935			$	70,643
Other expense, net							27,348				6,385				-				-				6,385
Income before income taxes							17,849				52,249				10,074				1,935				64,258
Income tax expense (3)							870				19,972				3,395				492				23,859
Net income						$	16,979			$	32,277			$	6,679			$	1,443			$	40,399
Basic net income per common share *						$	0.76			$	0.96			$	0.20			$	0.04			$	1.20
Diluted net income per common share *						$	0.76			$	0.95			$	0.20			$	0.04			$	1.19
Basic weighted average shares outstanding							22,399,952				33,768,828				33,768,828				33,768,828				33,768,828
Diluted weighted average shares outstanding							22,399,952				33,885,162				33,885,162				33,885,162				33,885,162
_____________________________

* Due to rounding to the nearest cent per diluted share, totals may not equal the sum of the line items in the table above.

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