snbr-20240928

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 28, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-25121

_______________________________________________________________________

SLEEP NUMBER CORPORATION

(Exact name of registrant as specified in its charter)


Minnesota		41-1597886
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


1001 Third Avenue South
Minneapolis,	Minnesota	55404
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (763) 551-7000

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	SNBR	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),

and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted

pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the

registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller

reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller

reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for

complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of September 28, 2024, 22,371,000 shares of the registrant’s Common Stock were outstanding.


1 \| 3Q 2024 FORM 10-Q		SLEEP NUMBER CORPORATION

Table of contents

PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SLEEP NUMBER CORPORATION

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(unaudited - in thousands, except per share amounts)


	September 28, 2024	December 30, 2023
Assets
Current assets:
Cash and cash equivalents	$1,592	$2,539
Accounts receivable, net of allowances of $1,134 and $1,437, respectively	17,026	26,859
Inventories	93,039	115,433
Prepaid expenses	17,827	16,660
Other current assets	40,784	44,637
Total current assets	170,268	206,128

Non-current assets:
Property and equipment, net	140,406	179,503
Operating lease right-of-use assets	367,133	395,411
Goodwill and intangible assets, net	66,468	66,634
Deferred income taxes	27,267	20,253
Other non-current assets	93,109	82,951
Total assets	$864,651	$950,880

Liabilities and Shareholders’ Deficit
Current liabilities:
Borrowings under revolving credit facility	$516,500	$539,500
Accounts payable	127,990	135,901
Customer prepayments	43,514	49,143
Accrued sales returns	19,688	22,402
Compensation and benefits	28,909	28,273
Taxes and withholding	17,685	17,134
Operating lease liabilities	82,488	81,760
Other current liabilities	57,268	61,958
Total current liabilities	894,042	936,071

Non-current liabilities:
Operating lease liabilities	318,665	351,394
Other non-current liabilities	100,728	105,343
Total liabilities	1,313,435	1,392,808

Shareholders’ deficit:
Undesignated preferred stock; 5,000 shares authorized, no shares issued and outstanding	—	—
Common stock, $0.01 par value; 142,500 shares authorized, 22,371 and 22,235 shares issued and outstanding, respectively	224	222
Additional paid-in capital	25,527	16,716
Accumulated deficit	(474,535)	(458,866)
Total shareholders’ deficit	(448,784)	(441,928)
Total liabilities and shareholders’ deficit	$864,651	$950,880

See accompanying notes to condensed consolidated financial statements.


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Table of contents

SLEEP NUMBER CORPORATION

AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(unaudited - in thousands, except per share amounts)


	Three Months Ended		Nine Months Ended
	September 28, 2024	September 30, 2023	September 28, 2024	September 30, 2023
Net sales	$426,617	$472,648	$1,305,479	$1,457,964
Cost of sales	167,089	201,537	528,287	612,343
Gross profit	259,528	271,111	777,192	845,621

Operating expenses:
Sales and marketing	205,480	221,143	596,392	649,410
General and administrative	33,070	31,948	111,722	111,144
Research and development	10,583	12,633	34,602	42,521
Restructuring costs	1,963	—	14,382	—
Total operating expenses	251,096	265,724	757,098	803,075
Operating income	8,432	5,387	20,094	42,546
Interest expense, net	12,057	10,958	36,626	30,008
(Loss) income before income taxes	(3,625)	(5,571)	(16,532)	12,538
Income tax (benefit) expense	(489)	(3,253)	(863)	2,637
Net (loss) income	$(3,136)	$(2,318)	$(15,669)	$9,901

Basic net (loss) income per share:
Net (loss) income per share – basic	$(0.14)	$(0.10)	$(0.69)	$0.44
Weighted-average shares – basic	22,643	22,479	22,588	22,412

Diluted net (loss) income per share:
Net (loss) income per share – diluted	$(0.14)	$(0.10)	$(0.69)	$0.44
Weighted-average shares – diluted	22,643	22,479	22,588	22,558

See accompanying notes to condensed consolidated financial statements.


3 \| 3Q 2024 FORM 10-Q		SLEEP NUMBER CORPORATION

Table of contents

SLEEP NUMBER CORPORATION

AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Deficit

(unaudited - in thousands)


	Common Stock		Additional Paid-in Capital	Accumulated Deficit	Total
	Shares	Amount	Additional Paid-in Capital	Accumulated Deficit	Total
Balance at December 30, 2023	22,235	$222	$16,716	$(458,866)	$(441,928)
Net loss	—	—	—	(7,482)	(7,482)
Stock-based compensation	134	1	4,116	—	4,117
Repurchases of common stock	(43)	—	(570)	—	(570)
Balance at March 30, 2024	22,326	$223	$20,262	$(466,348)	$(445,863)
Net loss	—	—	—	(5,051)	(5,051)
Stock-based compensation	32	1	3,991	—	3,992
Repurchases of common stock	(3)	—	(42)	—	(42)
Balance at June 29, 2024	22,355	$224	$24,211	$(471,399)	$(446,964)
Net loss	—	—	—	(3,136)	(3,136)
Stock-based compensation	24	—	1,432	—	1,432
Repurchases of common stock	(8)	—	(116)	—	(116)
Balance at September 28, 2024	22,371	$224	$25,527	$(474,535)	$(448,784)


	Common Stock		Additional Paid-in Capital	Accumulated Deficit	Total
	Shares	Amount	Additional Paid-in Capital	Accumulated Deficit	Total
Balance at December 31, 2022	22,014	$220	$5,182	$(443,579)	$(438,177)
Net income	—	—	—	11,465	11,465
Exercise of common stock options	17	—	389	—	389
Stock-based compensation	271	3	4,636	—	4,639
Repurchases of common stock	(118)	(1)	(3,362)	—	(3,363)
Balance at April 1, 2023	22,184	$222	$6,845	$(432,114)	$(425,047)
Net income	—	—	—	754	754
Exercise of common stock options	3	—	39	—	39
Stock-based compensation	33	—	5,251	—	5,251
Repurchases of common stock	(6)	—	(138)	—	(138)
Balance at July 1, 2023	22,214	$222	$11,997	$(431,360)	$(419,141)
Net loss	—	—	—	(2,318)	(2,318)
Stock-based compensation	22	—	982	—	982
Repurchases of common stock	(8)	—	(210)	—	(210)
Balance at September 30, 2023	22,228	$222	$12,769	$(433,678)	$(420,687)

See accompanying notes to condensed consolidated financial statements.


4 \| 3Q 2024 FORM 10-Q		SLEEP NUMBER CORPORATION

Table of contents

SLEEP NUMBER CORPORATION

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(unaudited - in thousands)


	Nine Months Ended
	September 28, 2024	September 30, 2023
Cash flows from operating activities:
Net (loss) income	$(15,669)	$9,901
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	50,379	55,196
Stock-based compensation	9,541	10,872
Net loss on disposals and impairments of assets	2,457	464
Deferred income taxes	(7,014)	(13,433)
Changes in operating assets and liabilities:
Accounts receivable	9,833	7,374
Inventories	22,394	(2,190)
Income taxes	1,708	3,571
Prepaid expenses and other assets	(8,012)	(5,903)
Accounts payable	4,980	5,199
Customer prepayments	(5,629)	(27,279)
Accrued compensation and benefits	788	(6,923)
Other taxes and withholding	(1,157)	5
Other accruals and liabilities	(13,775)	(5,038)
Net cash provided by operating activities	50,824	31,816

Cash flows from investing activities:
Purchases of property and equipment	(17,218)	(48,022)
Issuance of note receivable	(2,942)	(1,317)
Proceeds from sales of property and equipment	156	10
Net cash used in investing activities	(20,004)	(49,329)

Cash flows from financing activities:
Net (decrease) increase in short-term borrowings	(31,039)	20,334
Repurchases of common stock	(728)	(3,711)
Proceeds from issuance of common stock	—	428
Debt issuance costs	—	(424)
Net cash (used in) provided by financing activities	(31,767)	16,627

Net decrease in cash and cash equivalents	(947)	(886)
Cash and cash equivalents, at beginning of period	2,539	1,792
Cash and cash equivalents, at end of period	$1,592	$906

See accompanying notes to condensed consolidated financial statements.


5 \| 3Q 2024 FORM 10-Q		SLEEP NUMBER CORPORATION

Table of Contents

SLEEP NUMBER CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Business and Summary of Significant Accounting Policies

Business & Basis of Presentation

The Company prepared the condensed consolidated financial statements as of and for the three and nine months ended

September 28, 2024 of Sleep Number Corporation and its 100%-owned subsidiaries (Sleep Number or the Company),

without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and they reflect, in

the opinion of management, all normal recurring adjustments, including the elimination of all significant intra-entity

balances and transactions, necessary to present fairly its financial position as of September 28, 2024 and December 30,

2023, and the consolidated results of operations and cash flows for the periods presented. The historical and quarterly

consolidated results of operations may not be indicative of the results that may be achieved for the full year or any future

period.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S.

generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and

regulations. These condensed consolidated financial statements should be read in conjunction with the most recent

audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for

the fiscal year ended December 30, 2023 and other recent filings with the SEC.

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company to

make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities,

disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the

reported amounts of sales, expenses and income taxes during the reporting period. Predicting future events is inherently

an imprecise activity and, as such, requires the use of judgment. As future events and their effects cannot be determined

with precision, actual results could differ significantly from these estimates. Changes in these estimates will be reflected

in the consolidated financial statements in future periods and could be material. The Company’s critical accounting

policies consist of stock-based compensation, warranty liabilities and revenue recognition.

Income Taxes

Income tax benefit totaled $0.9 million for the nine months ended September 28, 2024, compared with income tax

expense of $3 million last year. The change in income tax expense was primarily due to the change in (loss) income

before income taxes levels and the impact of discrete tax expenses. Discrete tax expense, primarily stock-based

compensation tax shortfalls, was $2.6 million for the nine months ended September 28, 2024, compared to $1.1 million

for the same period last year.

Recent Issued Accounting Pronouncements Not Yet Adopted

Segment Reporting (Topic 280)

In November 2023, the Financial Accounting Standards Board issued guidance within Accounting Standards Update

(ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU requires

that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this

ASU and all existing disclosures in Topic 280. The Company has determined that its current business and operations

consist of a single business segment and a single reporting unit.

The amendments in this ASU are intended to improve segment disclosure requirements, primarily through enhanced

disclosures about significant segment expenses. The key amendments included in this ASU:

•Require disclosure on an annual and interim basis, of significant segment expenses that are regularly provided to

the chief operating decision maker (CODM) and are included within each reported measure of segment profit

and loss.

•Require disclosure on an annual and interim basis, an amount for other segment items (defined in this ASU) and

a description of its composition.


6 \| 3Q 2024 FORM 10-Q		SLEEP NUMBER CORPORATION

Table of Contents

SLEEP NUMBER CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

•Clarify that if the CODM uses more than one measure of the segment’s profit or loss in assessing performance,

one or more of those additional measures may be reported.

•Require disclosure of the title and position of the CODM and an explanation of how the CODM uses the

reported measure(s) of segment profit or loss in assessing performance.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning

after December 15, 2024, with early adoption permitted. This guidance is required to be adopted by the Company

beginning with the annual period of 2024. The amendments should be applied retrospectively to all prior periods

presented in the consolidated financial statements. The Company is currently evaluating the impact of this ASU on the

Company’s consolidated financial statements.

Currently, management does not believe that any other recently issued, but not yet effective accounting

pronouncements, if currently adopted, would have a material impact on the Company’s unaudited condensed

consolidated financial statements.

2. Fair Value Measurements

At September 28, 2024 and December 30, 2023, the Company had $20 million and $19 million, respectively, of debt

and equity securities that fund the deferred compensation plan and are classified in other non-current assets. The

Company also had corresponding deferred compensation plan liabilities of $20 million and $19 million at September 28,

2024 and December 30, 2023, respectively, which are included in other non-current liabilities. The majority of the debt

and equity securities are Level 1 as they trade with sufficient frequency and volume to enable the Company to obtain

pricing information on an ongoing basis. Unrealized gains/(losses) on the debt and equity securities offset those

associated with the corresponding deferred compensation plan liabilities.

3. Inventories

Inventories consisted of the following (in thousands):


	September 28, 2024	December 30, 2023
Raw materials	$6,638	$9,092
Work in progress	133	92
Finished goods	86,268	106,249
	$93,039	$115,433

4. Goodwill and Intangible Assets, Net

Goodwill and Indefinite-lived Intangible Assets

Goodwill was $64 million at September 28, 2024 and December 30, 2023. Indefinite-lived trade name/trademarks

totaled $1.4 million at both September 28, 2024 and December 30, 2023.

Definite-lived Intangible Assets

Patents were $2.0 million at both September 28, 2024 and December 30, 2023. Accumulated amortization was $0.9

million at September 28, 2024 and $0.8 million at December 30, 2023. Amortization expense for both the three months

ended September 28, 2024 and September 30, 2023, was $55 thousand, and for both the nine months ended

September 28, 2024 and September 30, 2023 was $0.2 million.


7 \| 3Q 2024 FORM 10-Q		SLEEP NUMBER CORPORATION

Table of Contents

SLEEP NUMBER CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

Annual amortization for patents for subsequent years are as follows (in thousands):


2024 (excluding the nine months ended September 28, 2024 )		$55
2025		226
2026		222
2027		222
2028		155
2029		99
Thereafter		46
Total future amortization for definite-lived intangible assets		$1,025

5. Credit Agreement

As of September 28, 2024, the Company’s credit facility had a total commitment amount of $680 million. The credit

facility is for general corporate purposes and to meet seasonal working capital requirements. The Amended and

Restated Credit and Security Agreement, dated February 14, 2018, among the Company, U.S. Bank National Association

and the several banks and other financial institutions from time to time party thereto (as amended, the Credit

Agreement), includes an accordion feature which allows the Company to increase the amount of the credit facility from

$680 million to $1.0 billion, subject to lenders’ approval. The Credit Agreement provides the lenders with a collateral

security interest in substantially all of the Company’s assets and those of its subsidiaries and requires the Company to

comply with, among other things, a maximum net leverage ratio and a minimum interest coverage ratio.

The maximum net leverage ratio permitted by the Credit Agreement is 5.00 to 1.00 for the quarterly period ended

September 28, 2024; 4.80 to 1.00 for the quarterly reporting period ending December 28, 2024; and 4.00 to 1.00 for

each quarterly reporting period occurring thereafter until maturity.

The minimum interest coverage ratio permitted by the Credit Agreement is 1.50 to 1.00 for both quarterly reporting

periods ending September 28, 2024 and December 28, 2024; and 3.00 to 1.00 for each quarterly reporting period

occurring thereafter until maturity.

The carrying amount of the outstanding borrowings under the Credit Agreement approximates fair value because

interest rates approximate the current rates available to the Company. Under the terms of the Credit Agreement, the

Company pays a variable rate of interest and a commitment fee based on its leverage ratio. The Credit Agreement

matures in December 2026. The Company was in compliance with all financial covenants as of September 28, 2024.

The following table summarizes the Company’s borrowings under the credit facility ($ in thousands):


	September 28, 2024	December 30, 2023
Outstanding borrowings	$516,500	$539,500
Outstanding letters of credit	$7,147	$7,147
Additional borrowing capacity	$156,353	$138,353
Weighted-average interest rate	8.2%	8.5%

6. Leases

The Company leases its retail, office and manufacturing space under operating leases which, in addition to the minimum

lease payments, may require payment of a proportionate share of the real estate taxes and certain building operating

expenses. While the Company’s local market development approach generally results in long-term participation in given

markets, the retail store leases generally provide for an initial lease term of five to ten years. The Company’s office and

manufacturing leases provide for an initial lease term of up to fifteen years. In addition, the Company’s mall-based retail

store leases may require payment of variable rent based on net sales in excess of certain thresholds. Certain leases may


8 \| 3Q 2024 FORM 10-Q		SLEEP NUMBER CORPORATION

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SLEEP NUMBER CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

contain options to extend the term of the original lease. The exercise of lease renewal options is at the Company’s sole

discretion. Lease options are included in the lease term only if exercise is reasonably certain at lease commencement.

The Company’s lease agreements do not contain any material residual value guarantees. The Company also leases

vehicles and certain equipment under operating leases with an initial lease term of three to six years.

The Company’s operating lease costs include facility, vehicle and equipment lease costs, but exclude variable lease

costs. Operating lease costs are recognized on a straight-line basis over the lease term, after consideration of rent

escalations and rent holidays. The lease term for purposes of the calculation begins on the earlier of the lease

commencement date or the date the Company takes possession of the property. During lease renewal negotiations that

extend beyond the original lease term, the Company estimates straight-line rent expense based on current market

conditions. Variable lease costs are recorded when it is probable the cost has been incurred and the amount can be

reasonably estimated.

At September 28, 2024, the Company’s finance right-of-use assets and lease liabilities were not significant.

Lease costs were as follows (in thousands):


	Three Months Ended		Nine Months Ended
	September 28, 2024	September 30, 2023	September 28, 2024	September 30, 2023
Operating lease costs(1)	$26,445	$28,517	$80,180	$84,889
Variable lease costs(2)	$42	$48	$1	$230

___________________________

(1)Includes short-term lease costs which are not significant.

(2)Variable lease costs include adjustments to percentage rent.

The maturities of operating lease liabilities as of September 28, 2024, were as follows(1) (in thousands):


2024 (excluding the nine months ended September 28, 2024)	$26,997
2025	103,848
2026	91,716
2027	75,205
2028	63,060
2029	43,265
Thereafter	73,361
Total operating lease payments(2)	477,452
Less: Interest	76,299
Present value of operating lease liabilities	$401,153

___________________________

(1)Future payments for real estate taxes and certain building operating expenses for which the Company is obligated are not included in the operating

lease liabilities. Total operating lease payments exclude $17 million of legally binding minimum lease payments for leases signed but not yet

commenced.

(2)Includes the current portion of $82 million for operating lease liabilities.

Other information related to operating leases was as follows:


	September 28, 2024	December 30, 2023
Weighted-average remaining lease term (in years)	5.5	5.9
Weighted-average discount rate	6.6%	6.5%


9 \| 3Q 2024 FORM 10-Q		SLEEP NUMBER CORPORATION

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SLEEP NUMBER CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)


	Nine Months Ended
(in thousands)	September 28, 2024	September 30, 2023
Cash paid for amounts included in present value of operating lease liabilities	$81,089	$80,650
Right-of-use assets obtained in exchange for operating lease liabilities	$29,390	$54,172

7. Repurchases of Common Stock

For the three months ended September 28, 2024 and September 30, 2023, we repurchased $0.1 million and $0.2

million, respectively, of common stock in connection with the vesting of restricted stock grants. For the nine months

ended September 28, 2024 and September 30, 2023, we repurchased $0.7 million and $3.7 million, respectively, of

common stock in connection with the vesting of restricted stock grants. We made no purchases under the Board-

approved stock purchase plan in either period. As of September 28, 2024, the remaining authorization under the Board-

approved $600 million share repurchase program was $348 million.

8. Revenue Recognition

Deferred contract assets and deferred contract liabilities are included in the condensed consolidated balance sheets as

follows (in thousands):


	September 28, 2024	December 30, 2023
Deferred contract assets included in:
Other current assets	$30,329	$28,567
Other non-current assets	50,981	54,795
	$81,310	$83,362


	September 28, 2024	December 30, 2023
Deferred contract liabilities included in:
Other current liabilities	$38,395	$36,421
Other non-current liabilities	63,594	69,098
	$101,989	$105,519

Deferred revenue and costs related to SleepIQ® technology are currently recognized on a straight-line basis over the

product's estimated life of 4.5 to 5.0 years because the Company’s inputs are generally expended evenly throughout the

performance period. During both the three months ended September 28, 2024 and September 30, 2023, the Company

recognized revenue of $10 million, that was included in the deferred contract liability balances at the beginning of the

respective periods. During both the nine months ended September 28, 2024 and September 30, 2023, the Company

recognized revenue of $28 million, that was included in the deferred contract liability balances at the beginning of the

respective periods.

Revenue from goods and services transferred to customers at a point in time accounted for approximately 98% of

revenues for both the three and nine months ended September 28, 2024 and September 30, 2023.


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SLEEP NUMBER CORPORATION

AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

Net sales were as follows (in thousands):


	Three Months Ended		Nine Months Ended
	September 28, 2024	September 30, 2023	September 28, 2024	September 30, 2023
Retail stores	$374,593	$409,268	$1,147,931	$1,270,076
Online, phone, chat and other	52,024	63,380	157,548	187,888
Total Company	$426,617	$472,648	$1,305,479	$1,457,964

Obligation for Sales Returns

The activity in the sales returns liability account was as follows (in thousands):


	Nine Months Ended
	September 28, 2024	September 30, 2023
Balance at beginning of year	$22,402	$25,594
Additions that reduce net sales	69,391	82,718
Deductions from reserves	(72,105)	(85,300)
Balance at end of period	$19,688	$23,012

9. Stock-based Compensation Expense

Total stock-based compensation expense was as follows (in thousands):


	Three Months Ended		Nine Months Ended
	September 28, 2024	September 30, 2023	September 28, 2024	September 30, 2023
Stock awards (1)	$774	$(82)	7,212	$8,031
Stock options	658	1,064	2,329	2,841
Total stock-based compensation expense (1)	1,432	982	9,541	10,872
Income tax benefit	285	118	2,004


		Page
PART I: FINANCIAL INFORMATION		1

Item 1.	Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Shareholders' Deficit	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26

PART II: OTHER INFORMATION		27

Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
SIGNATURES		30