UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended April 3, 1999
COMMISSION FILE NO. 0-25121
--------------------
SELECT COMFORT CORPORATION
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1597886
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6105 TRENTON LANE NORTH, SUITE 100
MINNEAPOLIS, MINNESOTA 55442
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (612) 551-7000
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 [X] NO [ ]
As of May 1, 1999, 18,584,198 shares of Common Stock of the Registrant were
outstanding.
<PAGE>
SELECT COMFORT CORPORATION
AND SUBSIDIARIES
INDEX
Page No.
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
April 3, 1999 and January 2, 1999................................. 3
Consolidated Statements of Operations
for the Three Months ended April 3, 1999
and April 4, 1998................................................. 4
Consolidated Statements of Cash Flows
for the Three Months ended April 3, 1999
and April 4, 1998................................................. 5
Notes to Consolidated Financial Statements........................ 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations..................... 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk........ 12
PART II: OTHER INFORMATION
Item 6. Exhibit Index..................................................... 15
<PAGE>
PART I: FINANCIAL INFORMATION
SELECT COMFORT CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
APRIL 3, JANUARY 2,
1999 1999
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $44,423 $45,561
Accounts receivable, net of allowance for doubtful
accounts of $2,602, and $2,750, respectively 11,658 10,624
Inventories (note 2) 10,364 10,136
Prepaid expenses 4,822 4,048
Deferred tax assets 5,690 5,448
---------- ----------
Total current assets 76,957 75,817
Property and equipment, net 30,506 29,125
Deferred tax assets 488 440
Other assets 847 852
---------- ----------
Total assets $108,798 $106,234
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $692 $930
Accounts Payable 12,766 12,079
Accruals:
Sales returns 5,693 6,021
Warranty costs 5,024 4,486
Compensation, taxes and benefits 4,116 4,843
Income taxes 838 648
Other 4,486 4,561
---------- ----------
Total current liabilities 33,615 33,568
Long-term debt, less current maturities - 29
Other liabilities 2,217 1,946
---------- ----------
Total liabilities 35,832 35,543
---------- ----------
Common 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, 18,577,313 and 18,435,687 shares issued 186 184
and outstanding, respectively
Additional paid-in capital 88,704 87,619
Accumulated deficit (15,924) (17,112)
---------- ----------
Total common shareholders' equity 72,966 70,691
---------- ----------
Total liabilities and shareholders' equity $108,798 $106,234
========== ==========
See accompanying notes to consolidated financial statements.
3
<PAGE>
SELECT COMFORT CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED
----------------------
APRIL 3, APRIL 4,
1999 1998
---------- ----------
Net sales $71,632 $58,671
Cost of sales 24,547 21,080
---------- ----------
Gross margin 47,085 37,591
---------- ----------
Operating expenses:
Sales and marketing 40,488 32,260
General and administrative 5,219 4,294
---------- ----------
Total operating expenses 45,707 36,554
---------- ----------
Operating income 1,378 1,037
---------- ----------
Other income (expense):
Interest income 539 228
Interest expense (34) (1,533)
Other, net 3 -
---------- ----------
Other income, net 508 ( 1,305)
---------- ----------
Income (loss) before income taxes 1,886 (268)
Income tax expense 698 150
---------- ----------
Net income (loss) $1,188 $(418)
========== ==========
Net income (loss) per share (note 3)
- basic and diluted $0.06 (0.26)
========== ==========
See accompanying notes to consolidated financial statements.
4
<PAGE>
SELECT COMFORT CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED
----------------------
APRIL 3, APRIL 4,
1999 1998
---------- ----------
Cash flows from operating activities:
Net income (loss) $1,188 $(418)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 1,400 1,253
Deferred tax assets (290) (43)
Interest expense from put warrant valuation - 956
Change in operating assets and liabilities:
Accounts receivable, net (1,034) (681)
Inventories (228) (73)
Prepaid expenses (774) 562
Accounts payable 687 (817)
Accrued sales returns (328) 287
Accrued warranty costs 538 163
Accrued compensation, taxes and benefits (727) (218)
Accrued income taxes 190 17
Other accrued liabilities (75) (414)
Other assets (2) (26)
Other liabilities 271 172
---------- ----------
Net cash provided by operating activities 816 720
---------- ----------
Cash flows used in investing activities - Purchases
of property and equipment (2,774) (1,910)
---------- ----------
Cash flows from financing activities:
Principal payments on debt (267) (239)
Proceeds from issuance of common stock 1,087 5
---------- ----------
Net cash provided by (used in)
financing activities 820 (234)
---------- ----------
Decrease in cash and cash equivalents (1,138) (1,424)
Cash and cash equivalents, at beginning of period 45,561 12,670
---------- ----------
Cash and cash equivalents, at end of period $44,423 $11,246
========== ==========
See accompanying notes to consolidated financial statements.
5
<PAGE>
SELECT COMFORT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF FINANCIAL STATEMENT PRESENTATION
The consolidated financial statements for the three months ended April 3, 1999
of Select Comfort Corporation and subsidiaries (the Company), have been prepared
by the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission and reflect, in the opinion of management,
all normal recurring adjustments necessary to present fairly the financial
position of the Company as of April 3, 1999 and January 2, 1999 and the results
of operations and cash flow for the periods presented.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
management believes the disclosures are adequate to make the information
presented not misleading. These consolidated financial statements should be read
in conjunction with the Company's most recent audited financial statements and
related notes included in the Company's Annual Report to Shareholders and its
1998 Form 10-K. Operating results for the Company on a quarterly basis may not
be indicative of operating results for the full year.
(2) INVENTORIES
Inventories consist of the following (in thousands):
APRIL 3, 1999 JANUARY 2, 1999
--------------- ---------------
Raw materials $7,002 $6,533
Work in progress 88 67
Finished goods 3,274 3,536
--------------- ---------------
$10,364 $10,136
=============== ================
6
<PAGE>
SELECT COMFORT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(3) NET INCOME (LOSS) PER COMMON SHARE
The following computations reconcile net income (loss) with net income (loss)
per common share-basic and diluted (dollars in thousands, except share and per
share amounts).
NET PER SHARE
LOSS SHARES AMOUNT
---------- ---------- ----------
THREE MONTHS ENDED APRIL 3, 1999
Net income $1,188
----------
BASIC EPS
Net income available to common shareholders $1,188 18,526,073 $0.06
---------- ---------- ==========
EFFECT OF DILUTIVE SECURITIES
Warrants - 861,463
Options - 960,915
---------- ----------
DILUTED EPS
Net income available to common shareholders
plus assumed conversions $1,188 20,348,451 $0.06
========== ========== ==========
NET PER SHARE
LOSS SHARES AMOUNT
---------- ---------- ----------
THREE MONTHS ENDED APRIL , 1998
Net loss $(418)
Less cumulative preferred dividends (225)
----------
BASIC AND DILUTED EPS
Net loss attributable to common shareholders $(643) 2,478,491 $(0.26)
========== ========== ==========
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements and the Notes thereto included herein. This
quarterly report on Form 10-Q contains forward-looking statements within the
meaning of the Private Securities Litigation Reform act of 1995. The statements
regarding Select Comfort Corporation contained in this report that are not
historical in nature, particularly those that utilize terminology such as "may,"
"will," "should," "expects," "anticipates," "estimates," "believes" or "plans,"
or comparable terminology, are forward-looking statements based on current
expectations and assumptions, and entail various risks and uncertainties that
could cause actual results to differ materially from those expressed in such
forward-looking statements. Important factors known to Select Comfort that could
cause such material differences are identified and discussed in Part I, Item 1
of our Annual Report on Form 10-K for the year ended January 2, 1999, which
discussion is incorporated herein by reference. Such important factors include
our ability to create product and brand name awareness, the effectiveness and
efficiency of our advertising, the level of consumer acceptance of our products,
the number and timing of new retail store openings, the performance of our
existing and new retail stores, our ability to manage our planned rapid store
expansion, our ability to successfully identify and respond to emerging trends
in the mattress industry, the level of competition in the mattress industry,
general economic conditions and consumer confidence, and our ability to maintain
cost-effective production and delivery of products.
OVERVIEW
Select Comfort is the leading vertically integrated manufacturer, specialty
retailer and direct marketer of innovative air beds and sleep-related products.
Since the introduction of our first air bed product in 1987, management has
focused on improving our product, expanding our product line, building
manufacturing and distribution systems and growing our four sales channels:
retail, direct marketing, roadshow and e-commerce.
Vertically integrated operations and control over four separate but
complementary sales channels enable us to develop and maintain direct customer
relationships as well as leverage advertising dollars. Sales generation is
driven primarily by targeted print, radio and television media which generate
customer inquiries. Direct marketing advertising is leveraged in all sales
channels. Marketing programs at retail stores focus on increasing customer
traffic, including a number of in-store activities and promotions.
Retail operations included 275 stores at April 3, 1999 including 14 leased
departments within larger retail stores (13 in Bed Bath & Beyond stores) and 264
stores at January 2, 1999 including 14 leased departments. We plan to open a
minimum of 69 retail stores during the remainder of 1999, including expansion of
the leased department concept. Two of the 11 retail store openings in the first
quarter of 1999 were in new markets. As of April 3, 1999, we had closed a total
of five stores since inception.
Historically, we have experienced strong comparable store sales growth,
reporting an increase of 12.8% for the three months ended April 3, 1999 and
39.4% for the three months ended April 4, 1998. We believe this performance is
due to increased awareness of our brand and product benefits, the relatively
young age of the store base and various initiatives implemented in recent
periods related to increased emphasis on the retail distribution channel. These
initiatives include (i) a change in focus of advertising toward brand awareness,
(ii) the evolution of retail store operations, including improvements in store
design, and (iii) the closer integration of direct marketing and retail
distribution channels. Comparable store sales results in the future will be
influenced by a variety of factors, including our ability to create product and
brand name awareness, the effectiveness and efficiency our advertising, our
ability to drive consumer traffic to retail stores and the level of consumer
acceptance of our products.
Quarterly and annual operating results may fluctuate significantly as a result
of a variety of factors, including increases or decreases in comparable store
sales, the timing, amount and effectiveness of advertising expenditures, any
changes in return rates, the timing of new store openings and related expenses,
competitive factors, net sales contributed by new stores, any disruptions in
third-party delivery services and general economic conditions and consumer
confidence. Our business is also subject to some seasonal influences, with
heavier concentrations of sales during the fourth quarter holiday season due to
increased mall traffic.
8
<PAGE>
A substantial portion of operating expenses is related to sales and marketing
expenses, including costs associated with opening new stores and advertising and
marketing expenditures. The level of such spending cannot be adjusted quickly
and is based, in significant part, on expectations of future customer inquiries
and net sales. Furthermore, a substantial portion of net sales are often
realized in the last month of a quarter, with such net sales frequently
concentrated in the last weeks or days of a quarter, due in part to our
promotional schedule. If we experience a shortfall in expected net sales or in
the conversion rate of customer inquiries, we may be unable to adjust spending
in a timely manner and our business, financial condition and operating results
may be materially adversely affected. Our historical results of operations may
not be indicative of the results that may be achieved for any future fiscal
period.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, our results of
operations expressed as percentages of net sales. Percentage amounts may not
total due to rounding.
THREE MONTHS ENDED
----------------------
APRIL 3, APRIL 4,
1999 1998
---------- ----------
Net sales 100.0% 100.0%
Cost of sales 34.3 35.9
---------- ----------
Gross margin 65.7 64.1
---------- ----------
Operating expenses:
Sales and marketing 56.5 55.0
General and administrative 7.3 7.3
---------- ----------
Total operating expenses 63.8 62.3
---------- ----------
Operating income 1.9 1.8
Other income, net 0.7 (2.2)
---------- ----------
Income (loss) before income taxes 2.6 (0.5)
Income tax expense 1.0 0.3
---------- ----------
Net income (loss) 1.7% (0.7)%
========== ==========
COMPARISON OF THREE MONTHS ENDED APRIL 3, 1999 WITH THREE MONTHS ENDED APRIL 4,
1998
NET SALES
Net sales increased 22.1% to $71.6 million for the three months ended April 3,
1999 from $58.7 million for the three months ended April 4, 1998 primarily due
to an increase in unit sales. The components of the increase in net sales were
(i) a $8.4 million increase associated with the opening of 64 new retail stores
during the past 12 months, (ii) a $4.2 million increase associated with an
increase of 12.8% in comparable store sales over the comparable period of the
prior year, resulting primarily from the continuing maturation of stores, and
(iii) a $400,000 decrease in direct marketing sales.
GROSS MARGIN
Gross margin increased to 65.7% for the three months ended April 3, 1999 from
64.1% for the three months ended April 4, 1998 primarily due to (i) improved
purchasing through volume discounts and better relationships with key suppliers
and (ii) improved leverage of fixed manufacturing costs over higher unit
volumes.
SALES AND MARKETING
Sales and marketing expenses increased 25.5% to $40.5 million for the three
months ended April 3, 1999 from $32.3 million for the three months ended April
4, 1998, and increased as a percentage of net sales to 56.5% from 55.0% for the
comparable prior year period. The increase in the dollar amount of sales and
marketing expenses was primarily due to (i) the opening of 64 new retail stores
during the last 12 months, (ii) increased advertising expenditures to support
the Company's growth and (iii) higher commissions, percentage rents and freight
expense related to the higher net sales. Sales and marketing expenses increased
as a percentage of net sales primarily due to advertising and promotional
expenditures increasing at a greater rate than net sales.
9
<PAGE>
GENERAL AND ADMINISTRATIVE
General and administrative expenses increased 21.5% to $5.2 million for the
three months ended April 3, 1999 from $4.3 million for the three months ended
April 4, 1998. The increase in the dollar amount of general and administrative
expenses was primarily due to increased spending to provide infrastructure to
support overall net sales growth.
OTHER INCOME (EXPENSE), NET
Other income increased $1.8 million to $500,000 for the three months ended April
3, 1999 from ($1.3) million for the three months ended April 4, 1998 primarily
due to (i) the inclusion of $1.0 million of non-cash interest expense in the
three months ended April 4, 1998 relating to the change in the fair value of an
outstanding put warrant and (ii) an increase in interest income due to the
increase in cash obtained from the completion of our initial public offering in
December 1998. The put provision associated with the warrant was eliminated
effective on completion of the initial public offering. Future periods will not
require the recording of non-cash interest expense associated with the put
warrant.
INCOME TAX EXPENSE (BENEFIT)
Income tax expense increased to $698,000 for the three months ended April 3,
1999 from $150,000 for the three months ended April 4, 1998 due to an increase
in taxable income in 1999 and the utilization of substantially all net operating
loss carryforwards in 1998.
LIQUIDITY AND CAPITAL RESOURCES
Our primary source of liquidity has been the sale of equity securities. We
completed our initial public offering in December 1998, resulting in net
proceeds of $44.6 million, which have been partially used for the repayment of
$15.0 million of debt. The Company had working capital of approximately $43.3
million at April 3, 1999 and $42.2 million at January 2, 1999.
Net cash provided by operating activities for the three months ended April 3,
1999 was approximately $800,000 and consisted primarily of net income adjusted
for non-cash expenses partially offset by increases in accounts receivables,
inventories and prepaid expenses. Net cash provided by operating activities for
the three months ended April 4, 1998 was approximately $700,000 and consisted
primarily of cash flows from operations before non-cash expenses and increases
in prepaid expenses, partially offset by an increase in accounts receivable and
a decrease in accounts payable.
Beginning in May 1997, we began offering our customers an unsecured revolving
credit arrangement to finance purchases through a third-party bank. In March
1999, we notified the bank of our intent to terminate this consumer credit
arrangement. We have signed a letter of intent with a third-party provider to
replace the terminated arrangement. We anticipate that the new arrangement will
be under terms that are no less favorable than under the existing arrangement
and that the transition to the new provider will occur in the third quarter. In
addition, amounts retained by the bank under the terminated arrangement,
approximately $12.4 million at April 3, 1999, are expected to be returned to the
Company shortly following termination and are not anticipated to be replaced by
similar amounts under the new agreement.
Net cash used in investing activities was approximately $2.8 million for the
three months ended April 3, 1999 and $1.9 million for the three months ended
April 4, 1998. Investing activities consisted of purchases of property and
equipment for new retail stores in both periods as well as for a new
manufacturing and distribution facility in the first quarter of 1999.
Net cash provided by financing activities was approximately $800,000 for the
three months ended April 3, 1999 and consisted of stock options offset by debt
repayments. Net cash used in financing activities was approximately $(200,000)
for the three months ended April 4, 1998 which consisted of debt repayments.
10
<PAGE>
In May 1999, the Board of Directors authorized management to repurchase up to
$10 million in shares of the Company's common stock in the open market due to
the availability of excess cash and the historically low valuation of the
Company's shares in the market. As of May 13, 1999 the Company had repurchased
575,000 shares for approximately $8.5 million. The Board of Directors may
authorize management to repurchase additional shares as warranted by available
cash and market conditions. We believe cash generated from operations, together
with existing cash balances, will be sufficient to satisfy anticipated
short-term working capital requirements and long-term liquidity needs.
LOOKING FORWARD
We are implementing several strategic initiatives designed to accelerate the
Company's growth. These initiatives include accelerating the growth in the
number of retail distribution points for our products, increasing our retail
advertising expenditures and expanding our product line. The increase in the
number of distribution points will be achieved through more aggressive retail
store growth, including expansion of the Company's leased department concept,
possibly with one or more additional partners. The Company has recently tested
increased retail advertising expenditures in selected markets and intends to
expand this retail advertising to additional markets across the United States.
Initial product line expansions will include the introduction of an adjustable
bed frame and a sofa sleeper product, each with fully adjustable air mattresses.
We believe that cash flow generated from operations together with existing cash
balances will be sufficient to meet the Company's working capital and liquidity
needs in connection with this growth strategy.
The success of our growth strategy and our profitability will depend on many
factors including (i) our ability to successfully open additional stores and
leased departments in new and existing markets, (ii) the effectiveness and
efficiency of our advertising in creating brand awareness of our products and
brand name, (iii) our ability to generate consumer inquiries and drive consumer
traffic to retail stores, (iv) the level of consumer acceptance of our existing
and new products and (v) competition in the mattress industry. In addition,
because store profitability generally grows with store maturity and advertising
becomes more effective as product awareness builds, the acceleration of retail
store growth and increased retail advertising could impact short-term earnings.
IMPACT OF YEAR 2000
STATE OF READINESS
Beginning in early 1996, we included certain Year 2000 initiatives and
remediation plans in our broader information systems strategic plan. In early
1998 we retained an independent consultant to assess the adequacy of Year 2000
initiatives and remediation plans. All essential information technology ("IT")
systems have been inventoried and remediation plans for any Year 2000 issues
have been implemented. Remediation plans included the development of Year 2000
compliant applications for order entry, customer service and point of sale
systems in fall 1996. In the third quarter of 1997, we purchased and implemented
an enterprise information system used in manufacturing operations, material
planning, inventory management, order processing, financial management and human
resources applications, which was upgraded to be Year 2000 compliant in
February, 1999. We purchased Year 2000 compliant upgrades to our payroll
applications in 1997 and our telephone system in 1998. Year 2000 compliant
upgrades for software applications for customer inquiries and for processing and
tracking warranty claims and returns have been purchased. We anticipate these
upgrades will be completed in the third quarter of 1999. With the implementation
of these applications and upgrades, we expect that all core applications and IT
systems will be Year 2000 compliant by the end of the third quarter of 1999.
In August 1998, we formed a Year 2000 project team ("Year 2000 Project Team") to
identify and address Year 2000 compliance matters, including significant non-IT
systems which are comprised of the embedded technology used in our buildings,
plant, equipment and other infrastructure. The Year 2000 Project Team has
inventoried all material Year 2000 issues in non-IT systems. We expect that
remedial action for all non-IT systems will be completed by the end of the
second quarter of 1999.
11
<PAGE>
During the first quarter of 1998, we initiated discussions with significant
suppliers regarding their plans to remediate Year 2000 issues. We sent each of
the significant suppliers a questionnaire inquiring as to the magnitude of their
Year 2000 issues and the status of their readiness. We have received assurances
from a majority of these suppliers that they will become Year 2000 compliant in
a timely manner. We have not received responses from all of the third parties
with which we do business. In addition to the questionnaires, a supplier
certification program has been established under which suppliers must meet
rigorous standards relating to quality, service, the ability to deliver
materials on a timely basis and Year 2000 compliance. To date, 10 key suppliers
have been certified and other authorized suppliers are in the process of seeking
certification. All key suppliers, including the Eastern European supplier of air
chambers, have notified us that they are or will be Year 2000 compliant during
1999.
In addition to suppliers, we also rely upon governmental agencies, utility
companies, telecommunication service companies and other service providers
outside of our control. There can be no assurance that such governmental
agencies or other third parties will not suffer a Year 2000 business disruption
that could have a material adverse effect on our business, financial condition
or operating results.
COSTS TO ADDRESS THE YEAR 2000 ISSUE
We estimate approximately $165,000 has been incurred, through April 3, 1999, to
address Year 2000 issues. We estimate that by mid-1999 an additional $100,000
will be incurred to complete our remediation plans required for IT systems,
including systems software costs and consulting fees. We do not believe that
costs for non-IT systems will have a material adverse effect on our business,
financial condition or operating results.
RISKS PRESENTED BY THE YEAR 2000 ISSUE
If any third party who provides goods or services essential to our business
activities fails to appropriately address Year 2000 issues, such failure could
have a material adverse effect on our business, financial condition or operating
results. For example, a Year 2000 related disruption on the part of the
financial institutions which process credit card sales could have a material
adverse effect on our business, financial condition or operating results.
CONTINGENCY PLANS
The Year 2000 Project Team's initiatives include the development of contingency
plans in the event we have not completed all remediation plans in a timely
manner. In addition, the Year 2000 Project Team is in the process of developing
contingency plans in the event that any third party who provides goods or
services essential to our business fails to appropriately address Year 2000
issues. The Year 2000 Project Team expects to conclude the development of these
contingency plans by the end of the third quarter of 1999.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
12
<PAGE>
PART II: OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
None.
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit
Number Description
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SELECT COMFORT CORPORATION
/S/Daniel J. McAthie
-------------------------------------
May 17, 1999 Daniel J. McAthie
(Chief Executive Officer)
/s/James C. Raabe
-------------------------------------
James C. Raabe
(Chief Financial Officer)
14
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Location
27.1 Financial Data Schedule Filed herewith electronically
15
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<PERIOD-END> APR-03-1999
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