In addition, the company continues to benefit from significant gains realized in manufacturing and logistics, which include global sourcing initiatives and the implementation of a hub-and-spoke logistics network. At the end of the second quarter, Select Comfort was operating nine of its planned 13 U.S. hubs.
The operating profit margin was 2.7 percent of net sales in the second quarter, compared to 8.8 percent in the second quarter of last year. Sales and marketing expenses increased $8.1 million compared to the second quarter of last year, reflecting the increased store base and a 12 percent increase in media spending, which totaled $25.2 million. Research and development expenses increased $0.3 million, reflecting the company's continued commitment to accelerate the pace of innovation.
Cash and marketable securities totaled $12.7 million as of June 30, 2007, compared to $90.2 million at year-end 2006, largely reflecting the company's ongoing share repurchase program. In the second quarter, the company returned an additional $51.5 million to shareholders through the repurchase of 3.0 million shares, increasing its repurchases through June 30, 2007 to $94.3 million and 5.4 million shares. Select Comfort currently has $225 million available under its share repurchase program.
Net sales for the first six months of 2007 totaled $395.5 million, compared to $400.4 million in the first six months of 2006. Net income totaled $13.6 million in the first half of 2007, compared to $22.5 million in the first half of 2006. Earnings per diluted share for the first six months of 2007 totaled $0.27, compared to $0.40 per diluted share for the first six months of 2006.
Outlook: The company reiterated its full-year 2007 outlook for net sales of between $840 million and $860 million, and earnings of between $0.87 and $0.93 per diluted share. The company remains confident in its long-term growth targets for net sales growth of 15 percent or higher, and earnings growth of 20 percent or higher.
Conference Call: Management will host its regularly scheduled conference call to discuss the company's results at 5:00 p.m. Eastern Time (4:00 p.m. Central; 2:00 p.m. Pacific) on 25th july, 2007. To listen to the webcast, please access the investor relations area of the company's Web site.
A replay will remain available until 6:00 p.m. Eastern Time August 10, 2007. The webcast replay will remain available in the investor relations area of the company's Web site for approximately 60 days.
Select Comfort Corporation
marketing@alchempro.com
