®
`The leader in sleep innovation, Sleep Number (NASDAQ: SNBR) delivers proven, quality sleep
`through effortless, adjustable comfort and biometric sleep tracking. Thirty years ago, Sleep Number
`transformed the mattress industry with the idea that ‘one size does not fit all’ when it comes to
`sleep. Today, we provide consumers with individualized sleep solutions through our complete line of
`®
`Sleep Number 360 smart beds and bedding. Based in Minneapolis, Minn., with more than 4,000
`team members and 570 U.S. stores, our revenues in fiscal 2017 were $1.4 billion.
`
`Our business
`
`We are the exclusive designer, manufacturer, marketer, retailer and servicer of a complete line of
`®
`Sleep Number beds and bedding. This vertically integrated business model enables us to provide
`a seamless end-to-end customer experience. Unlike traditional mattress manufacturers that
`primarily sell through third-party retailers, 99 percent of our net sales are directly to consumers.
`
`The company’s presence has evolved from a small kiosk in a mall in Roseville, Minn. in 1992 to a
`®
`retailer with a national store footprint and products exclusively sold through Sleep Number stores
`and sleepnumber.com. Our average sales-per-square foot is in the top 10 among U.S. specialty
`retailers and is driven by a differentiated store experience and modern store design.
`
`Our products
`
`®
`Our complete line of Sleep Number products includes:
`
`®
`Sleep Number 360 smart bed, powered by SleepIQ® technology, delivers proven quality sleep.
`It intuitively senses and automatically adjusts comfort to keep both partners sleeping soundly all
`night long. As of July 2018, all Sleep Number models are 360® smart beds, including: 
`Innovation Series provides individualized comfort and temperature-balancing innovation.
`Mattresses include the i7, i8 and i10.
`Performance Series balances softness and pressure-relieving support. Mattresses include the p5
`and p6.
`The Classic Series provides adjustability on each side of the bed featuring regular and plush style
`mattresses. Mattresses include the c2 and c4.
`
`®
`The benefits of the Sleep Number 360 smart bed have been validated by third-party consumer
`satisfaction awards and through our clinical sleep research, which has shown that participants who
`slept on our smart bed generally fell asleep faster, experienced deeper sleep with fewer
`disturbances and experienced greater relief from back pain than those sleeping on a traditional
`innerspring mattress.
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`®
`360  Smart Adjustable Bases – Our FlexFit™ smart adjustable bases offer consumers the ability
`to raise and lower the head and foot of their beds to relieve pressure, help reduce snoring and
`provide comfort and relaxation for reading or watching TV. The FlexFit 3 smart adjustable base
`includes Foot Warming, which gently warms the foot of the bed to help the sleeper fall asleep
`faster.
`Pillows – Our selection of pillows improves comfort and support with the proper firmness, fill and
`fit to improve each person’s sleep experience.
`Bedding – From temperature balancing sheets to SmartFit™ technology, our bedding products
`are designed to enhance individualized comfort. Our exclusive, individualized temperature layer,
`DualTemp™, is the only sleep solution that addresses customers temperature challenges with
`active cooling and heating technology. 
`
`Our technology
`
`The Sleep Number 360™ smart bed is powered by SleepIQ® technology – a touchless, biometric
`sensor technology integrated into the mattress that tracks personal sleep data during the night.
`SleepIQ® technology tracks breathing and heart rates, and restful time in bed. Based on that data,
`a proprietary algorithm delivers a personal SleepIQ® score, from 1 to 100 each morning, along with
`a report of the critical biometric statistics that went into generating that score.
`
`Based on individual SleepIQ® data, the technology learns the person’s routine and uses adaptive
`algorithms and predictive modeling to offers insights and makes suggestions to help people
`achieve their best sleep. The SleepIQ® API (Application Program Interface) can connect to an
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`individual’s other cloud services and track items important to them – including exercise, bedroom
`temperature and individualized comfort – each day and night so people can be smarter about their
`sleep. 
`
`Each night, SleepIQ® technology generates more than seven billion biometric data points and
`facilitates daily interactions with customer data and insights to inform decision making and product
`development. This biometric data advances smart, connected products that empower our
`customers with the knowledge to adjust for their best sleep. 
`
`In September 2015, we completed the acquisition of BAM Labs, Inc., the Silicon Valley pioneer of
`biometric sensor and sleep monitoring. The acquisition strengthened our leadership in sleep
`technology with unprecedented data and connected product capabilities. We had partnered with
`BAM since 2012 to develop and commercialize SleepIQ® technology. BAM now operates as
`SleepIQ® Labs. The deeper collaboration of our teams has resulted in acceleration of our
`innovation pipeline, efficiencies in our product development cycle and our ability to deliver
`meaningful consumer benefits. 
` 
`
`Our stores
`
` 
`At our more than 570 Sleep Number® stores in 50 U.S. states, we offer an interactive, educational
`experience that is distinctly different from other retailers. In 2018, we opened a flagship store in the
`Flatiron District in New York City, which takes Sleep Number’s best-in-class retail experience to yet
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`another level, with interactive technology and digital experiences in a loft-like setting. In 2015 and
`2016, Sleep Number was recognized with the Silver Outstanding International Store Design Award
`from the Association of Retail Environments. 
`
`Our modern store design features the complete line of Sleep Number® 360 smart bed. With the
`help of a Sleep Professional, customers experience IndividualFit® 3-D Imaging, a digital map that
`displays the body’s pressure points. Starting with a firm mattress, customers watch the pressure
`dissipate as the bed adjusts to their body to alleviate discomfort and find their Sleep Number®
`setting – the ideal comfort setting for a better night’s sleep. Sleep Professionals listen and guide
`shoppers to the right solutions that help them know better sleep, including bedding solutions to
`address common sleep problems like allergies and temperature swings, and the PillowFit®
`experience that helps customers find a pillow that perfectly fits their needs.
`
`Our retail strategy integrates our physical and digital Sleep Number experience. Within our physical
`stores, our average sales per full-time employee are 50 percent higher than other top U.S. specialty
`retail brands. The digital Sleep Number® experience focuses on engagement with new customers
`and deepening relationships with existing customers. Elements of our store sales process are built
`into the digital experience to improve consumer research and conversion. We continue to advance
`the productivity of sleepnumber.com, where customers learn about our products, find their nearest
`store location and purchase online.
`
`Our history
`
`Sleep Number has evolved from a 1-800 direct marketing mattress company aimed at helping
`people with back pain, to a national consumer lifestyle brand with technology as our differentiator.
`
`Key milestones in our history:
`
`1987 – Select Comfort founded
`®
`1992 – First Sleep Number store opens in Rosedale Mall, Roseville, Minn.
`1997 – Manufacturing plant opens in Irmo, S.C.
`1998 – Select Comfort becomes a publicly traded company listed on The NASDAQ Stock Market
`(NASDAQ Global Select Market) under the symbol “AIRB”
`1999 – Manufacturing plant opens in Salt Lake City, U.T.
`2000 – Select Comfort’s Stock Market symbol changes from “AIRB” to “SCSS”
`2000 – Launched sleepnumber.com
`®
`2000 – First sale of a Sleep Number bed on QVC
`2000 – First Sleep Number bed home delivery
`2007 – U.S. housing bubble burst
`2008 – U.S. banking crisis
`®
`2009 – First Sleep Number non-mall store opening
`2009 – Company survives the resulting market downturn and near bankruptcy
`2010 – Began operating in non-mall locations to help build store and brand awareness
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`2010 – Discontinued distribution through non-company-owned mattress retailers in the
`contiguous U.S.
`2012 – Shelly Ibach appointed President and CEO of Select Comfort
`®
`2013 – Acquired Comfortaire Corporation
`®
`®
`2014 – Introduced SleepIQ technology and The SleepIQ Kids™ bed
`®
`2014 – Launched the Know Better Sleep campaign, featuring the consumer benefits of our
`latest sleep innovations
`2015 – Acquired BAM Labs
`®
`2015 – J.D. Power announces Sleep Number ranks highest in customer satisfaction with
`mattresses
`2015 – Introduced it™ bed at Consumer Electronics Show
`™
`2016 – Introduced the Sleep Number 360 smart bed at Consumer Electronics Show
`®
`2016 – J.D. Power announces Sleep Number ranks highest in customer satisfaction with
`mattresses, two years in a row
`2017 – Customer relationship center opens in New Orleans
`2017 – Changed name to Sleep Number Corporation and NASDAQ symbol to “SNBR”
`®
`2018 – Sleep Number entered into a multi-year partnership with the National Football League
`as the Official Sleep + Wellness partner
`®
`2018 – J.D. Power announces Sleep Number ranks highest in customer satisfaction with
`mattresses
`
`Manufacturing, distribution and service
`
`®
`Manufacturing – We manufacture all Sleep Number beds at our U.S. production facilities. We
`have manufacturing plants located in Irmo, S.C., and Salt Lake City, Utah. At these two facilities,
`employees perform the quilting and sewing of the fabric covers for our beds and final assembly
`and packaging of mattresses and bases. Our electrical Firmness Control™ systems also are
`assembled in our Utah plant. We have one manufacturing plant in Greenville, S.C. that
`®
`assembles, packages and distributes Comfortaire mattresses and bases.
`Delivery – We offer Comfort ServiceSM home delivery and setup, which includes assembly and
`mattress removal. In selected markets, we provide home delivery, assembly and mattress removal
`services through third-party providers.
`Service – We maintain an in-house customer service department staffed by teams of specialists
`that provide service and support via phone, email, “live chat” and social media. Our customer
`service team is central to an ongoing relationship with our customers. Direct access to our
`customers also provides insights and identifies emerging trends as we work to continuously
`improve our product and service quality and advance product innovation. To help continue to
`better our ongoing relationships with customers, we opened a second customer relationship
`center in New Orleans in 2017.
`
`For more information, please download our Corporate Fact Sheet.
`
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