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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):  March 3, 2025 
SNBR Logo JPG.jpg
SLEEP NUMBER CORPORATION
(Exact name of registrant as specified in its charter)

Minnesota
(State or other jurisdiction of incorporation)
000-25121 41-1597886
(Commission File Number) (IRS Employer Identification No.)

1001 Third Avenue South, Minneapolis, MN  55404
(Address of principal executive offices) (Zip Code) 
(763) 551-7000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). 
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.  ☐



ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On March 3, 2025, Sleep Number Corporation, a Minnesota corporation (“Sleep Number”), entered into an Eleventh Amendment (the “Eleventh Amendment”) amending the Amended and Restated Credit and Security Agreement, dated as of February 14, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among U.S. Bank National Association (“U.S. Bank”), as Administrative Agent, Swing Line Lender and Issuing Lender, and certain other financial institutions party thereto.

The Eleventh Amendment, among other things, (a) adds a definition for "Liquidity" which means, on any date of determination, the sum of (x) Sleep Number's and its Subsidiaries' unrestricted cash that is free and clear of Liens (other than those in favor of the Administrative Agent) plus (y) the aggregate amount of unused Revolving Credit Commitments available for a Credit Event (as each is defined in the Credit Agreement) on such date; (b) adds a Liquidity financial covenant wherein Sleep Number shall cause the Liquidity to equal or exceed $40 million as of the last day of each fiscal month; (c) deems our Net Leverage Ratio (as defined in the Credit Agreement) as greater than or equal to 4.50 to 1.00 as of the Eleventh Amendment effective date to set pricing for the Applicable Commitment Fee Rate and Applicable Margin (as each is defined in the Credit Agreement) until receipt of the compliance certificate for the quarterly reporting period ending September 27, 2025, (d) adjusts the permissible maximum Net Leverage Ratio (as defined in the Credit Agreement) to (I) 4.75 to 1.00 for the quarterly reporting periods ending March 29, 2025 and June 28, 2025, (II) 4.50 to 1.00 for the quarterly reporting period ending September 27, 2025, (III) 4.35 to 1.00 for the quarterly reporting period ending January 3, 2026, and (IV) 4.00 to 1.00 for each quarterly reporting period occurring thereafter, and (e) adjusts the permissible minimum Interest Coverage Ratio (as defined in the Credit Agreement) to (I) 1.90 to 1.00 for the quarterly reporting periods ending March 29, 2025, June 28, 2025, and September 27, 2025, (II) 2.10 to 1.00 for the quarterly reporting period ending January 3, 2026, and (III) 3.00 to 1.00 for each quarterly reporting period occurring thereafter. A fee for the amendment is payable to the approving lenders in an amount equal to 20 basis points multiplied by the sum of such lender's Revolving Credit Commitment and outstanding Term Loans (as each is defined in the Credit Agreement). The foregoing description of the Eleventh Amendment is qualified in its entirety by reference to the complete terms of the Eleventh Amendment, which Sleep Number will file as an exhibit to its forthcoming Annual Report on Form 10-K.

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On March 5, 2025, Sleep Number issued a press release announcing results for the fiscal fourth quarter and full year ended December 28, 2024. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
The information under Item 1.01 above is incorporated by reference into this Item 2.03.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d)    Exhibits.
Exhibit No. Description of Exhibit
99.1
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)






SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

    SLEEP NUMBER CORPORATION
    (Registrant)
         
Dated:  March 5, 2025
   By:       /s/ Samuel R. Hellfeld
    Name:   Samuel R. Hellfeld
    Title:   Executive Vice President, Chief Legal and Risk Officer

EX-99.1 2 a2024-q4ex991earnings.htm EX-99.1 Document
Exhibit 99.1
snbrlogojpg.jpg

FOR IMMEDIATE RELEASE

SLEEP NUMBER ANNOUNCES FOURTH QUARTER AND FULL YEAR 2024 Results

•Delivered a fourth quarter gross profit rate of 59.9%, up 330 basis points (bp) versus the prior year, with a full-year gross profit rate of 59.6%, up 190 bp versus the prior year
•Reduced fourth operating expenses by $28 million year-over-year, with an $88 million reduction for full year 2024 (before restructuring costs)
•Reported a fourth quarter net loss of $5 million compared with a net loss of $25 million for the same period last year
•Delivered fourth quarter adjusted EBITDA of $26 million, up 43% versus the same period last year, with full year adjusted EBITDA of $120 million which was at the midpoint of our most recent earnings outlook
•Announced in a separate press release the appointment of Linda Findley as Sleep Number’s President and Chief Executive Officer and Board member effective April 7, 2025

MINNEAPOLIS – (March 5, 2025) – Sleep Number Corporation (Nasdaq: SNBR) today reported results for the year ended December 28, 2024.

“In the face of significant ongoing weakness in the U.S. bedding industry, we have transformed Sleep Number’s operating model over the past 18 months for greater financial resilience. In 2024, we delivered gross margin rate improvement and operating cost reductions that were nearly double our original targets for the year, while generating positive free cash flow,” said Shelly Ibach, Chair, President and CEO. “While the marketplace remains extremely challenging, our dedicated team is intently focused on driving improved demand and further advancing our operating model transformation, which position Sleep Number to deliver profitable long-term growth when the market recovers.”

Fourth Quarter Overview
•Net sales of $377 million were down 12% versus the prior year, including one to two percentage points of pressure from lower store count versus the prior year
•Gross margin of 59.9% was up 330 bp versus the prior year, driven by year-over-year product cost reductions, favorable product mix, and efficiency gains in our home delivery and logistics operations
•Operating expenses of $219 million were down $28 million versus the prior year (before restructuring costs)
•Net loss of $5 million compared with a net loss of $25 million for the same period last year
•Adjusted EBITDA of $26 million was up 43% compared to the prior year, with an adjusted EBITDA margin of 7.0%, up 270 bp versus the prior year

Full Year Overview
•Net sales decreased 11% to $1.68 billion in 2024
•Gross margin of 59.6% of net sales was up 190 bp versus the prior year, including the benefit of product cost reductions through value engineering and ongoing supplier negotiations and ongoing efficiencies in our home delivery and logistics operations
•Operating expenses of $962 million were reduced by $88 million versus the prior year (before restructuring costs)
•Net loss of $20 million versus a net loss of $15 million last year
•Adjusted EBITDA of $120 million, with an adjusted EBITDA margin of 7.1%, up 40 bp versus the prior year

Cash Flows and Liquidity Review
•Net cash provided by operating activities of $27 million for the year, up $36 million versus the same period last year
•Free cash flow of $4 million for the year, up $70 million versus the prior year
•Leverage ratio of 4.2x EBITDAR at the end of the year versus covenant maximum of 4.8x



Sleep Number Announces Fourth-quarter and Full-year 2024 Results - Page 2 of 10    
Amended Credit Agreement
The company also announced today that it has entered into an amendment for its existing revolving credit facility, including permitted financial covenant levels, to provide greater flexibility through 2025. Additional details regarding the credit agreement amendment are available on the Form 8-K filed with the Securities and Exchange Commission.

Leadership Transition
In a separate press release today, the company also announced:
•Linda Findley has been appointed as Sleep Number’s President and Chief Executive Officer, and a member of the Board effective April 7, 2025
•In addition, Phillip M. Eyler has been appointed independent Chair of the Board, effective upon the conclusion of the 2025 Annual Meeting

Financial Outlook
As Ms. Findley transitions into her role, we want to provide her with the time and flexibility necessary to evaluate our strategies and business trends prior to issuing a 2025 financial outlook at a later date.

Conference Call Information
Management will host its regularly scheduled conference call to discuss the company’s results at 5 p.m. EST (4 p.m. CST; 2 p.m. PST) today. To access the webcast, please visit the investor relations area of the Sleep Number website at https://ir.sleepnumber.com. The webcast replay will remain available for approximately 60 days.

About Sleep Number Corporation
Sleep Number is a wellness technology company. We are guided by our purpose to improve the health and wellbeing of society through higher quality sleep; to date, our innovations have improved nearly 16 million lives. Our wellness technology platform helps solve sleep problems, whether it’s providing individualized temperature control for each sleeper through our Climate360® smart bed or applying our 32 billion hours of longitudinal sleep data and expertise to research with global institutions.

Our smart bed ecosystem drives best-in-class engagement through dynamic, adjustable, and effortless sleep with personalized digital sleep and health insights; our millions of Smart Sleepers are loyal brand advocates. And our 3,700 mission-driven team members passionately innovate to drive value creation through our vertically integrated business model, including our exclusive direct-to-consumer selling in nearly 650 stores and online.

To learn more about life-changing, individualized sleep, visit a Sleep Number® store near you, our newsroom and investor relations sites, or SleepNumber.com

Forward-looking Statements

Statements used in this news release relating to future plans, events, financial results or performance, such as the statements that the company has transformed its operating model for greater financial resilience and is focused on driving demand and taking deliberate actions to strengthen the company’s operating fundamentals, which position the company to deliver profitable long-term growth when the market recovers, statements about its CEO and Board leadership transition, and future plans to issue financial guidance are forward-looking statements subject to certain risks and uncertainties which could cause the company’s results to differ materially. The most important risks and uncertainties are described in the company’s filings with the Securities and Exchange Commission, including in Item 1A of the company’s Annual Report on Form 10-K and other periodic reports. Forward-looking statements speak only as of the date they are made, and the company does not undertake any obligation to update any forward-looking statement.

Investor Contact: Dave Schwantes; (763) 551-7498; investorrelations@sleepnumber.com
Media Contact: Julie Elepano; (414) 732-9840; julie.elepano@sleepnumber.com




Sleep Number Announces Fourth-quarter and Full-year 2024 Results - Page 3 of 10    

SLEEP NUMBER CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations
(unaudited – in thousands, except per share amounts)
 
Three Months Ended
  December 28,
2024		 % of
Net Sales		 December 30,
2023		 % of
Net Sales
Net sales $ 376,817  100.0  % $ 429,518  100.0  %
Cost of sales 151,236  40.1  % 186,609  43.4  %
Gross profit 225,581  59.9  % 242,909  56.6  %
Operating expenses:
Sales and marketing 170,232  45.2  % 198,032  46.1  %
General and administrative 38,234  10.1  % 35,477  8.3  %
Research and development 10,653  2.8  % 13,276  3.1  %
Restructuring costs 3,684  1.0  % 15,728  3.7  %
Total operating expenses 222,803  59.1  % 262,513  61.1  %
Operating income (loss) 2,778  0.7  % (19,604) (4.6  %)
Interest expense, net 11,742  3.1  % 12,687  3.0  %
Loss before income taxes (8,964) (2.4  %) (32,291) (7.5  %)
Income tax benefit (4,299) (1.1  %) (7,103) (1.7  %)
Net loss $ (4,665) (1.2  %) $ (25,188) (5.9  %)
Net loss per share – basic $ (0.21)   $ (1.12)  
Net loss per share – diluted $ (0.21)   $ (1.12)  
Reconciliation of weighted-average shares outstanding:
Basic weighted-average shares outstanding 22,659    22,483   
Dilutive effect of stock-based awards —    —   
Diluted weighted-average shares outstanding 22,659    22,483   

For the three months ended December 28, 2024 and December 30, 2023, potentially dilutive stock-based awards have been excluded from the calculation of diluted weighted-average shares outstanding, as their inclusion would have had an anti-dilutive effect on our net loss per diluted share.




Sleep Number Announces Fourth-quarter and Full-year 2024 Results - Page 4 of 10    

SLEEP NUMBER CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations
(unaudited – in thousands, except per share amounts)
 
  Twelve Months Ended
December 28,
2024		 % of
Net Sales		 December 30,
2023		 % of
Net Sales
Net sales $ 1,682,296  100.0  % $ 1,887,482  100.0  %
Cost of sales 679,523  40.4  % 798,952  42.3  %
Gross profit 1,002,773  59.6  % 1,088,530  57.7  %
Operating expenses:
Sales and marketing 766,624  45.6  % 847,442  44.9  %
General and administrative 149,956  8.9  % 146,621  7.8  %
Research and development 45,255  2.7  % 55,797  3.0  %
Restructuring costs 18,066  1.1  % 15,728  0.8  %
Total operating expenses 979,901  58.2  % 1,065,588  56.5  %
Operating income 22,872  1.4  % 22,942  1.2  %
Interest expense, net 48,368  2.9  % 42,695  2.3  %
Loss before income taxes (25,496) (1.5  %) (19,753) (1.0  %)
Income tax benefit (5,162) (0.3  %) (4,466) (0.2  %)
Net loss $ (20,334) (1.2  %) $ (15,287) (0.8  %)
Net loss per share – basic $ (0.90)   $ (0.68)  
Net loss per share – diluted $ (0.90)   $ (0.68)  
Reconciliation of weighted-average shares outstanding:
Basic weighted-average shares outstanding 22,606    22,429   
Dilutive effect of stock-based awards —    —   
Diluted weighted-average shares outstanding 22,606    22,429   

For the years ended December 28, 2024 and December 30, 2023, potentially dilutive stock-based awards have been excluded from the calculation of diluted weighted-average shares outstanding, as their inclusion would have had an anti-dilutive effect on our net loss per diluted share.




Sleep Number Announces Fourth-quarter and Full-year 2024 Results - Page 5 of 10    
SLEEP NUMBER CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
(unaudited – in thousands, except per share amounts)
subject to reclassification
  
  December 28,
2024		 December 30,
2023
Assets    
Current assets:
Cash and cash equivalents $ 1,950  $ 2,539 
Accounts receivable, net of allowances of $1,113 and $1,437, respectively
 17,516  26,859 
Inventories 103,152  115,433 
Prepaid expenses 14,568  16,660 
Other current assets 44,098  44,637 
Total current assets 181,284  206,128 
Non-current assets:    
Property and equipment, net 129,574  179,503 
Operating lease right-of-use assets 356,641  395,411 
Goodwill and intangible assets, net 66,412  66,634 
Deferred income taxes 33,575  20,253 
Other non-current assets 93,324  82,951 
Total assets $ 860,810  $ 950,880 
Liabilities and Shareholders’ Deficit    
Current liabilities:    
Borrowings under revolving credit facility $ 546,600  $ 539,500 
Accounts payable 107,619  135,901 
Customer prepayments 46,933  49,143 
Accrued sales returns 19,092  22,402 
Compensation and benefits 31,038  28,273 
Taxes and withholding 18,619  17,134 
Operating lease liabilities 82,307  81,760 
Other current liabilities 55,804  61,958 
Total current liabilities 908,012  936,071 
Non-current liabilities:
Operating lease liabilities 307,201  351,394 
Other non-current liabilities 97,183  105,343 
Total non-current liabilities 404,384  456,737 
Total liabilities 1,312,396  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, 22,388 and 22,235 shares issued and outstanding, respectively
 224  222 
Additional paid-in capital 27,390  16,716 
Accumulated deficit (479,200) (458,866)
Total shareholders’ deficit (451,586) (441,928)
Total liabilities and shareholders’ deficit $ 860,810  $ 950,880 





Sleep Number Announces Fourth-quarter and Full-year 2024 Results - Page 6 of 10    
SLEEP NUMBER CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited – in thousands)
subject to reclassification
 
  Twelve Months Ended
  December 28,
2024		 December 30,
2023
Cash flows from operating activities:    
Net loss $ (20,334) $ (15,287)
Adjustments to reconcile net loss to net cash provided by (used in)
   operating activities:
Depreciation and amortization 66,351  74,043 
Stock-based compensation 11,444  14,855 
Net loss on disposals and impairments of assets 4,315  2,898 
Deferred income taxes (13,322) (12,295)
Changes in operating assets and liabilities:
Accounts receivable 9,343  (854)
Inventories 12,281  (1,399)
Income taxes 3,987  (5,969)
Prepaid expenses and other assets (10,867) (5,220)
Accounts payable (15,910) (28,934)
Customer prepayments (2,210) (24,038)
Accrued compensation and benefits 2,755  (2,943)
Other taxes and withholding (2,502) (519)
Other accruals and liabilities (18,188) (3,366)
Net cash provided by (used in) operating activities 27,143  (9,028)
Cash flows from investing activities:
Purchases of property and equipment (23,505) (57,056)
Proceeds from sales of property and equipment 156  21 
Issuance of notes receivable (2,942) (1,317)
Net cash used in investing activities (26,291) (58,352)
Cash flows from financing activities:
Net (decrease) increase in short-term borrowings (673) 73,463 
Repurchases of common stock (768) (3,747)
Proceeds from issuance of common stock —  428 
Debt issuance costs —  (2,017)
Net cash (used in) provided by financing activities (1,441) 68,127 
Net (decrease) increase in cash and cash equivalents (589) 747 
Cash and cash equivalents, at beginning of period 2,539  1,792 
Cash and cash equivalents, at end of period $ 1,950  $ 2,539 





Sleep Number Announces Fourth-quarter and Full-year 2024 Results - Page 7 of 10    
SLEEP NUMBER CORPORATION
AND SUBSIDIARIES
Supplemental Financial Information
(unaudited)
 
  Three Months Ended Twelve Months Ended
  December 28,
2024		 December 30,
2023		 December 28,
2024		 December 30,
2023
Percent of sales:        
Retail stores 86.6  % 85.9  % 87.6  % 86.8  %
Online, phone, chat and other 13.4  % 14.1  % 12.4  % 13.2  %
Total Company 100.0  % 100.0  % 100.0  % 100.0  %
Sales change rates:
Retail comparable-store sales (9  %) (14  %) (9  %) (12  %)
Online, phone and chat (17  %) (20  %) (17  %) (15  %)
Total Retail comparable sales change (10  %) (15  %) (10  %) (12  %)
 Net opened/closed stores and other
 (2  %) 1  % (1  %) 1  %
Total Company (12  %) (14  %) (11  %) (11  %)
Stores open:
Beginning of period 643  678  672  670 
Opened 1  9  12  36 
Closed (4) (15) (44) (34)
End of period 640  672  640  672 
Other metrics:
Average sales per store ($ in 000's) 1
 $ 2,601  $ 2,853 
Average sales per square foot 1
 $ 841  $ 926 
Stores > $2 million net sales 2
 57  % 65  %
Stores > $3 million net sales 2
 18  % 24  %
Average revenue per smart bed unit 3
 $ 5,959  $ 5,541  $ 5,818  $ 5,755 

1 Trailing twelve months Total Retail comparable sales per store open at least one year.
2 Trailing twelve months for stores open at least one year (excludes online, phone and chat sales).
3 Represents Total Retail (stores, online, phone and chat) net sales divided by Total Retail smart bed units.




Sleep Number Announces Fourth-quarter and Full-year 2024 Results - Page 8 of 10    
SLEEP NUMBER CORPORATION AND SUBSIDIARIES
Earnings before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)
(in thousands)

We define earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) as net (loss) income plus: income tax expense (benefit), interest expense, depreciation and amortization, stock-based compensation, restructuring costs, CEO transition/proxy contest costs, and asset impairments. Management believes Adjusted EBITDA is a useful indicator of our financial performance and our ability to generate cash from operating activities. Our definition of Adjusted EBITDA may not be comparable to similarly titled definitions used by other companies. The table below reconciles Adjusted EBITDA, which is a non-GAAP financial measure, to the comparable GAAP financial measure:
  Three Months Ended Trailing Twelve Months Ended
  December 28,
2024		 December 30,
2023		 December 28,
2024		 December 30,
2023
Net loss $ (4,665) $ (25,188) $ (20,334) $ (15,287)
Income tax benefit (4,299) (7,103) (5,162) (4,466)
Interest expense 11,742  12,687  48,368  42,695 
Depreciation and amortization 15,628  17,984  64,979  72,479 
Stock-based compensation 1,903  3,982  11,444  14,855 
Restructuring costs 1
 3,684  15,728  18,066  15,728 
CEO transition/Proxy contest costs 2
 998  —  998  — 
Asset impairments 1,220  198  1,220  672 
Adjusted EBITDA $ 26,211  $ 18,288  $ 119,579  $ 126,676 

1 Represents costs related to business restructuring actions initiated in the fourth quarter of fiscal 2023.
2 Represents costs related to CEO transition activities of $0.2 million and proxy contest costs of $0.8 million which were both initiated in the fourth quarter of fiscal 2024.


Free Cash Flow
(in thousands)

  Three Months Ended Trailing Twelve Months Ended
  December 28,
2024		 December 30,
2023		 December 28,
2024		 December 30,
2023
Net cash (used in) provided by operating activities
 $ (23,681) $ (40,844) $ 27,143  $ (9,028)
Subtract: Purchases of property and equipment 6,287  9,034  23,505  57,056 
Free cash flow $ (29,968) $ (49,878) $ 3,638  $ (66,084)
 
Note - Our Adjusted EBITDA calculations and Free Cash Flow data are considered non-GAAP financial measures and are not in accordance with, or preferable to, "as reported," or GAAP financial data. However, we are providing this information as we believe it facilitates analysis of the Company's financial performance by investors and financial analysts.
GAAP - generally accepted accounting principles in the U.S.




Sleep Number Announces Fourth-quarter and Full-year 2024 Results - Page 9 of 10    
SLEEP NUMBER CORPORATION AND SUBSIDIARIES
Calculation of Net Leverage Ratio under Revolving Credit Facility
(in thousands)

  Trailing Twelve Months Ended
  December 28,
2024		 December 30,
2023
Borrowings under revolving credit facility $ 546,600  $ 539,500 
Outstanding letters of credit 7,147  7,147 
Finance lease obligations 241  319 
Consolidated funded indebtedness $ 553,988  $ 546,966 
Operating lease liabilities 1
 389,508  433,154 
Total debt including operating lease liabilities (a) $ 943,496  $ 980,120 
Adjusted EBITDA (see above) $ 119,579  $ 126,676 
Consolidated rent expense 107,105  113,801 
Consolidated EBITDAR (b) $ 226,684  $ 240,477 
Net Leverage Ratio under revolving credit facility (a divided by b) 4.2 to 1.0 4.1 to 1.0
1Reflects operating lease liabilities included in our financial statements under ASC 842.


Note - Our Net Leverage Ratio under Revolving Credit Facility, Adjusted EBITDA and EBITDAR calculations are considered non-GAAP financial measures and are not in accordance with, or preferable to, "as reported," or GAAP financial data. However, we are providing this information as we believe it facilitates analysis of the Company's financial performance by investors and financial analysts.
GAAP - generally accepted accounting principles in the U.S.







Sleep Number Announces Fourth-quarter and Full-year 2024 Results - Page 10 of 10    
SLEEP NUMBER CORPORATION AND SUBSIDIARIES
Calculation of Return on Invested Capital (Adjusted ROIC)
(in thousands)
 
Adjusted ROIC is a financial measure we use to determine how efficiently we deploy our capital. It quantifies the return we earn on our adjusted invested capital. Management believes Adjusted ROIC is also a useful metric for investors and financial analysts. We compute Adjusted ROIC as outlined below. Our definition and calculation of Adjusted ROIC may not be comparable to similarly titled definitions and calculations used by other companies. The tables below reconcile adjusted net operating profit after taxes (Adjusted NOPAT) and total adjusted invested capital, which are non-GAAP financial measures, to the comparable GAAP financial measures:

  Trailing Twelve Months Ended
  December 28,
2024		 December 30,
2023
Adjusted net operating profit after taxes (Adjusted NOPAT)    
Operating income $ 22,872  $ 22,942 
Add: Operating lease interest 1
 26,775  27,777 
Less: Income taxes 2
 (11,907) (11,851)
Adjusted NOPAT $ 37,740  $ 38,868 
  
Average adjusted invested capital
Total deficit $ (451,586) $ (441,928)
Add: Long-term debt 3
 546,841  539,819 
Add: Operating lease liabilities 4
 389,508  433,154 
Total adjusted invested capital at end of period $ 484,763  $ 531,045 
  
Average adjusted invested capital 5
 $ 497,972  $ 496,612 
  
Adjusted ROIC 6
 7.6  % 7.8  %
1
Represents the interest expense component of lease expense included in our financial statements under ASC 842, Leases.
2
Reflects annual effective income tax rates, before discrete adjustments, of 24.0% and 23.4% for December 28, 2024 and December 30, 2023, respectively.
3
Long-term debt includes existing finance lease liabilities.
4
Reflects operating lease liabilities included in our financial statements under ASC 842.
5
Average adjusted invested capital represents the average of the last five fiscal quarters' ending adjusted invested capital balances.
6
Adjusted ROIC equals Adjusted NOPAT divided by average adjusted invested capital.
Note - The Company's Adjusted ROIC calculation and data are considered non-GAAP financial measures and are not in accordance with, or preferable to, GAAP financial data. However, we are providing this information as we believe it facilitates analysis of the Company's financial performance by investors and financial analysts.
GAAP - generally accepted accounting principles in the U.S.