On Feb. 7, Sleep Number bed manufacturer Select Comfort (NASDAQ:SCSS) released fourth-quarter earnings for the period ended Dec. 30.

  • Net revenue increased 5.6%, thanks to 17 new company-owned stores, but it was offset by a 9% decline in same-store sales.
  • The operating margin shrunk 500 bps, mainly because of an asset impairment charge of $4.2 million and stock-option expenses of $1.7 million.
  • For 2007, the company expects revenue between $900 million and $925 million and diluted EPS between $1.02 and $1.09 per share.

(Figures in millions, except per-share data)

Income Statement Highlights

Q4 2006

Q4 2005

Change

Sales

$198.0

$187.5

5.6%

Net Profit

$10.8

$15.8

(31.9%)

EPS

$0.20

$0.28

(28.6%)

Diluted Shares

54.2

56.0

(3.2%)



Get back to basics with a look at the income statement.

Margin Checkup

Q4 2006

Q4 2005

Change*

Gross Margin

60.9%

60.2%

0.7

Operating Margin

8.1%

13.1%

(5.0)

Net Margin

5.4%

8.4%

(3.0)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q4 2006

Q4 2005

Change

Cash + ST Invest.

$46.6

$68.0

(31.5%)

Accounts Rec.

$12.2

$6.2

95.1%

Inventory

$24.1

$22.0

9.7%


Liabilities

Q4 2006

Q4 2005

Change

Accounts Payable

$46.1

$42.7

8.0%

Long-Term Debt

$0

$0

n/a



Learn the ways of the balance sheet.

Cash Flow Highlights

YTD 2006

YTD 2005

Change

Cash From Ops.

$59.4

$87.5

(32.1%)

Capital Expenditures

$31.1

$25.8

20.3%

Free Cash Flow

$28.3

$61.7

(54.1%)



Find out why Fools always follow the money.

Related Companies:

  • Tempur-Pedic (NYSE:TPX)
  • Sealy (NYSE:ZZ)
  • Ethan Allen (NYSE:ETH)

Related Foolishness:

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