-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, INhirC+FF1/2erTx6AyFEaJ0+MTWWzh64VAC+WhpXrlmA4NfcEB4ctxOfdubufIK OQny/QC5bqERN57pbDcD9w== 0000827187-01-500025.txt : 20010717 0000827187-01-500025.hdr.sgml : 20010717 ACCESSION NUMBER: 0000827187-01-500025 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 ITEM INFORMATION: FILED AS OF DATE: 20010716 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SELECT COMFORT CORP CENTRAL INDEX KEY: 0000827187 STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD FURNITURE [2510] IRS NUMBER: 410157886 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-25121 FILM NUMBER: 1681577 BUSINESS ADDRESS: STREET 1: 6105 TRENTON LANE NORTH CITY: MINNEAPOLIS STATE: MN ZIP: 55344 BUSINESS PHONE: 7635517000 8-K 1 a2001_2ndqtr-pressrelease.txt SELECT COMFORT 2ND QTR PRESS RELEASE 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): JULY 12, 2001 SELECT COMFORT CORPORATION (Exact name of registrant as specified in its charter) MINNESOTA 0-25121 41-1597886 (State of Incorporation) (Commission File (IRS Employer Number) Identification No.) 6105 TRENTON LANE NORTH MINNEAPOLIS, MINNESOTA 55442 (Address of principal (Zip Code) executive offices) Registrant's telephone number, including area code: (763) 551-7000 ITEM 9. REGULATION FD DISCLOSURE. On July 12, 2001, the registrant issued a press release, as follows: FOR IMMEDIATE RELEASE CONTACT: Mark Kimball (763) 551-7070 July 12, 2001 Select Comfort Corporation SELECT COMFORT CORPORATION ANNOUNCES IMPROVED SECOND QUARTER RESULTS MINNEAPOLIS, MINN. (July 12, 2001) - Select Comfort Corporation (NASDAQ: SCSS) today announced results for the second quarter ended June 30, 2001. Net sales were $62.7 million compared to $61.8 million for the second quarter of 2000. The company reported a net loss of $3.5 million, or $0.19 per share, compared to a net loss of $3.5 million, or $0.19 per share, for the second quarter of 2000. Operating losses for the second quarter of 2001 were $3.2 million compared to operating losses of $5.4 million in the prior-year period, and to operating losses of $9.7 million in the first quarter of 2001. The net loss for the second quarter of 2000 is net of non-cash income tax benefits of $1.9 million that were subsequently expensed in the fourth quarter of 2000. Overall, second quarter sales increased by 1.5 percent as compared to the second quarter of 2000. Sales generated through new selling efforts, including the QVC shopping network and the company's direct-mail factory outlet, offset the impact of lower direct marketing and retail sales, including a four percent decline in comparable sales for retail stores open at least twelve months. "Our turnaround efforts are producing tangible results and are reflected in significant improvements in operating performance compared to the second quarter of 2000 and the first quarter of 2001," said Bill McLaughlin, chief executive officer. "This improvement comes during what is historically our lowest seasonal sales quarter, and in the face of an economic slowdown that has hurt our sales efforts since the fourth quarter of 2000." 2 "Sales volumes continue to be our critical issue - a challenge currently shared by nearly every retailer in America," McLaughlin continued. "With the completion of our $11 million financing in June and with earnings before interest and non-cash charges approaching breakeven, we are focusing on improving the effectiveness of our sales and marketing efforts. We remain committed to our goal of becoming profitable in the second half of 2001." Select Comfort will hold a conference call to discuss its second quarter results on Friday, July 13, at 11:00 a.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 1:00 p.m. Central Time on Friday, July 13, through 5:00 p.m. Central Time on Tuesday, July 17, 2001. To access the replay, please call 888-296-6946 from anywhere in the U. S. International callers may dial 402-998-0536. An archived replay of the conference call may also be accessed after approximately 1:30 p.m. Central Time on Friday, July 13, at www.selectcomfort.com. Founded in 1987, Select Comfort Corporation is the leader in sleep solutions technology, holding 27 U.S. issued or pending patents for its products. The company designs, manufactures and markets a line of adjustable-firmness mattresses, including the SLEEP NUMBER(R) bed, as well as foundations and sleep accessories. Select Comfort's products are sold through its 327 retail stores located nationwide, including 24 leased departments in Bed Bath & Beyond stores; through its national direct marketing operations; and 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. Some of the forward-looking statements in this press release relate to the success of our turn-around strategy, including in particular our ability to continue to reduce our costs, the success of our Sleep Number marketing and advertising campaign, and our ability to expand profitable distribution of our products. 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: 3 o The ability of the company to maintain sufficient levels of working capital to support operating needs and growth initiatives. 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 continue to attract and retain key personnel, including qualified sales professionals. 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 Economic trends and consumer confidence. o Industry competition. 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. The company has no obligation to publicly update or revise any of the forward-looking statements that may be in this news release. 4 SELECT COMFORT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED) THREE MONTHS ENDED SIX MONTHS ENDED ------------------------ ------------------------ JUNE 30, JULY 1, JUNE 30, JULY 1, 2001 2000 2001 2000 ----------- ----------- ----------- ----------- Net sales $ 62,742 $ 61,787 $128,198 $137,946 Cost of sales 22,428 21,886 46,039 49,032 ----------- ----------- ----------- ----------- Gross margin 40,314 39,901 82,159 88,914 ----------- ----------- ----------- ----------- Operating expenses: Sales and marketing 37,394 38,543 81,568 83,816 General and administrative 5,954 6,712 12,967 15,232 Store closings/impairments 142 37 488 37 ----------- ----------- ----------- ----------- Total operating expenses 43,490 45,292 95,023 99,085 ----------- ----------- ----------- ----------- Operating loss (3,176) (5,391) (12,864) (10,171) ----------- ----------- ----------- ----------- Other income (expense): Interest income 40 309 115 684 Interest expense (254) (2) (352) (4) Equity in loss of affiliate 0 (246) 0 (428) Other, net (140) (5) (142) (48) ----------- ----------- ----------- ----------- Other income (expense), net (354) 56 (379) 204 ----------- ----------- ----------- ----------- Loss before income taxes (3,530) (5,335) (13,243) (9,967) Income tax expense (benefit) 0 (1,870) 115 (3,504) ----------- ----------- ----------- ----------- Net loss $ (3,530) $ (3,465) $(13,358) $ (6,463) =========== =========== =========== =========== Net loss per share - basic and diluted $ (0.19) $ (0.19) $ (0.74) $ (0.36) =========== =========== =========== =========== Weighted average shares - basic and diluted 18,119 17,818 18,087 17,786 =========== =========== =========== ===========
5 SELECT COMFORT CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (UNAUDITED) JUNE 30, DECEMBER 30, ASSETS 2001 2000 ------------ ------------ Current assets: Cash and cash equivalents $ 8,848 $ 1,498 Marketable securities - 3,950 Accounts receivable, net of allowance for doubtful accounts of $260, and $264, respectively 2,106 2,693 Inventories 8,953 11,083 Prepaid expenses 5,297 4,741 ------------ ------------ Total current assets 25,204 23,965 Property and equipment, net 34,207 37,063 Other assets 3,558 3,644 ------------ ------------ Total assets $ 62,969 $ 64,672 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt $ 29 $ 38 Accounts payable 19,014 17,271 Accruals: Sales returns 4,618 5,284 Compensation, taxes and benefits 5,934 6,238 Other 6,609 7,565 ------------ ------------ Total current liabilities 36,204 36,396 Long-term debt, less current maturities 12,466 2,322 Accrued warranty costs 5,725 5,745 Other liabilities 4,006 3,609 ------------ ------------ Total liabilities 58,401 48,072 ------------ ------------ Shareholders' equity: Undesignated preferred stock; 5,000,000 shares authorized, no shares issued and outstanding - - Common stock, $.01 par value; 95,000,000 shares authorized, 18,126,265 and 17,962,689 shares issued and outstanding, respectively 181 180 Additional paid-in capital 80,777 79,452 Accumulated deficit (76,390) (63,032) ------------ ------------ Total shareholders' equity 4,568 16,600 ------------ ------------ Total liabilities and shareholders' equity $ 62,969 $ 64,672 ============ ============
6 SELECT COMFORT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED) SIX MONTHS ENDED ----------------------- JUNE 30, JULY 1, 2001 2000 ----------- ----------- Cash flows from operating activities: Net loss $(13,358) $ (6,463) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 4,994 4,514 Loss on disposal of assets 496 178 Deferred tax assets - (3,583) Change in operating assets and liabilities: Accounts receivable, net 681 569 Inventories 2,130 (1,795) Prepaid expenses 90 49 Income taxes - 2,227 Accounts payable 1,743 1,063 Accrued sales returns (666) (562) Accrued warranty costs (20) 1,006 Accrued compensation, taxes and benefits (304) (485) Other accrued liabilities (868) 153 Other assets (75) 447 Other liabilities 397 426 ----------- ----------- Net cash used in operating activities (4,760) (2,256) ----------- ----------- Cash flows from investing activities: Purchases of property and equipment (2,367) (7,589) Investment in marketable securities 3,950 10,696 ----------- ----------- Net cash provided by investing activities 1,583 3,107 ----------- ----------- Cash flows from financing activities: Principal payments on debt (18) - Proceeds from issuance of common stock 191 404 Net proceeds from issuance of long-term debt 10,354 - ----------- ----------- Net cash provided by financing activities 10,527 404 ----------- ----------- Increase in cash and cash equivalents 7,350 1,255 Cash and cash equivalents, at beginning of period 1,498 7,441 ----------- ----------- Cash and cash equivalents, at end of period $ 8,848 $ 8,696 =========== =========== 7 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: July 13, 2001 By /s/ Mark A. Kimball ------------------------------------- Title: Senior Vice President --------------------------------- 8 -----END PRIVACY-ENHANCED MESSAGE-----