Select Comfort Reports Fourth-quarter And Full-year 2012 Results

“In the first few weeks of 2013, sales trends have quickly normalized. We will execute our growth strategy with operational discipline as we advance marketing, product innovation and market development. We remain committed to delivering an unparalleled sleep experience for our customers as we continue progressing toward our goal of at least $1.5 billion in sales and 15 percent operating margin by 2015.”

Cash from operating activities was $101 million for full-year 2012 compared to $91 million in 2011. Capital expenditures for full-year 2012 increased to $52 million as compared to $24 million in 2011, driven by increased investment in stores and information systems. During the fourth quarter, the company returned $10 million to shareholders through the repurchase of 0.4 million shares of its common stock, bringing the total share repurchases year-to-date to $30 million, or 1.1 million shares. As of the end of the quarter, cash, cash equivalents and marketable-debt securities totaled $178 million, and the company had no borrowings under its revolving credit facility.

Financial OutlookThe company expects to generate full-year 2013 earnings per diluted share of between $1.65 and $1.80, a 15% to 26% increase vs. full-year 2012 adjusted earnings per diluted share of $1.43. This outlook reflects a company-controlled comparable sales growth target of at least 10 percent and a net increase in store count from 410 at year-end 2012 to between 435 and 445 by year-end 2013.

The company currently anticipates that 2013 capital expenditures will be $70-$80 million, reflecting new stores, relocated and remodeled stores, along with continued investment in customer-management systems. While the company’s first priority for capital deployment is to invest in sustained profitable growth, it currently plans to continue repurchasing shares in 2013, with the objective of maintaining share count at current levels.

Acquisition and Additional Strategic InvestmentThe company also today announced the purchase of the business and assets of Comfortaire Corporation, a manufacturer and marketer of adjustable air-supported sleep systems, in a $15.5 million transaction that closed on Jan. 17, 2013.

“This investment progresses our role as the leader in delivering innovative products as part of an individualized sleep experience, while also strengthening our company’s competitive advantages. Specifically, with Comfortaire, we anticipate benefits from the convergence of intellectual property,” explained Ibach. “We also are pleased that the second-largest adjustable air-bed company – with its experienced team and shared commitment to quality, innovation and individualization – is now part of Select Comfort.”

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