SNBR amends credit deal: fixed margins, tighter covenants, 2027 term

Rhea-AI Filing Summary

Sleep Number (SNBR) amended its credit agreement, extending the maturity to December 3, 2027 and adjusting key terms. The revolving credit facility is reduced from $485 million to $475 million, and to $465 million on July 31, 2026. Pricing shifts to fixed grids: the Applicable Margin for Term SOFR Loans is 4.0% through December 31, 2026 and 4.25% starting January 1, 2027; the commitment fee is 0.50% through December 31, 2026 and 0.75% thereafter.

The amendment increases scheduled term-loan amortization by $1,250,000 per quarter beginning March 31, 2027 (aggregate $3,750,000). It terminates the accordion and tightens/clarifies covenants, including maximum Net Leverage Ratio stepping to 4.00x thereafter, a Liquidity minimum of $30 million until September 30, 2026 and $40 million monthly thereafter, refreshed Interest Coverage thresholds, and a new quarterly minimum EBITDA test. The company states it was in compliance following the amendment. Separately, Stephen L. Gulis, Jr. retired from the Board effective November 4, 2025.

Insights

Credit & Covenants Analyst

Refinancing extends runway to 2027 with tighter covenants.

The amendment pushes out maturity to December 3, 2027, modestly trims the revolver to $475M and then $465M, and replaces leverage-based pricing with fixed margins: Term SOFR at 4.0% through Dec 31, 2026 and 4.25% thereafter; commitment fee at 0.50% rising to 0.75% in 2027. Scheduled amortization increases by $1.25M per quarter beginning Mar 31, 2027 (aggregate $3.75M).

Covenants are recalibrated: Net Leverage steps to a sustained 4.00% (4.00x) thereafter, Liquidity floors at $30M until Sep 30, 2026 and $40M monthly thereafter, refreshed Interest Coverage thresholds, and a new quarterly minimum EBITDA test starting the quarter ending Apr 4, 2026. The company reports covenant compliance post-amendment.

The removal of the accordion limits upsizing flexibility, while higher margins and fees increase borrowing costs. Actual impact depends on facility usage and performance against the stepped covenants.

false000082718700008271872025-11-042025-11-04

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):  November 4, 2025 

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 November 4, 2025, Sleep Number Corporation, a Minnesota corporation (“Sleep Number”), entered into a Twelfth Amendment (the “Twelfth 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 Twelfth Amendment, among other things: (a) extends the maturity date of the Credit Agreement to December 3, 2027; (b) reduces the revolving credit facility from $485 million to $475 million, which decreases further to $465 million on July 31, 2026; (c) replaces the leverage-based pricing grids used to determine the Applicable Margin and Applicable Commitment Fee Rate (each as defined in the Credit Agreement) in favor of (I) with respect to Applicable Margin for Term SOFR Loans, (x) 4.0% until December 31, 2026 and (y) 4.25% starting January 1, 2027 and continuing thereafter, and (II) with respect to the Applicable Commitment Fee Rate, (x) 0.50% until December 31, 2026 and (y) 0.75% starting January 1, 2027 and continuing thereafter; (d) on each Regularly Scheduled Payment Date (as defined in the Credit Agreement) occurring on and after March 31, 2027, increases the amortization of outstanding term loans an additional $1,250,000 (for an aggregate scheduled principal payment of $3,750,000); (e) terminates the accordion feature; (f) adjusts the permissible maximum Net Leverage Ratio (as defined in the Credit Agreement) to (I) 5.25 to 1.00 for the quarterly reporting period ended September 27, 2025, (II) 4.50 to 1.00 for the quarterly reporting period ending January 3, 2026, (III) 4.75 to 1.00 for the quarterly reporting period ending April 4, 2026, (IV) 4.80 to 1.00 for the quarterly reporting period ending July 4, 2026, and (V) 4.00 to 1.00 for each quarterly reporting period thereafter; (g) adjusts the Liquidity financial covenant so that the Company must ensure that liquidity is no lower than $30 million until September 30, 2026, and $40 million for each monthly reporting period thereafter; (h) adjusts the permissible minimum Interest Coverage Ratio to (I) 1.50 to 1.00 for the quarterly reporting period ended September 27, 2025, (II) 2.10 to 1.00 for the quarterly reporting periods ending January 3, 2026 and April 4, 2026, (III) 1.80 to 1.00 for the quarterly reporting period ending July 4, 2026, (IV) 2.10 to 1.00 for the reporting period ending October 3, 2026, and (V) 2.20 to 1.00 for each quarterly reporting period occurring thereafter; (i) adds a new quarterly minimum EBITDA covenant test that begins for the quarterly reporting period ending April 4, 2026; (j) adjusts the consolidated EBITDA calculation to include an addback for certain expenses and costs incurred for the trailing twelve months for discontinued operations, downsized functions and employment expenses for laid-off employees; and (k) provides for additional and more frequent reporting requirements. Following such amendment, the Company was in compliance with all covenants.

In connection with the Twelfth Amendment, the Company agreed to pay the lenders certain amendment fees and to reimburse the lenders for certain expenses. The foregoing description of the Twelfth Amendment is qualified in its entirety by reference to the complete terms of the Twelfth Amendment, which Sleep Number will file as an exhibit to its forthcoming Quarterly Report on Form 10-Q.

ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS

As announced in a Form 8-K filed March 13, 2025, Stephen L. Gulis, Jr., agreed to retire or resign from the Board no later than the completion of the Company’s debt refinancing or at the conclusion of the 2026 Annual Meeting, whichever occurs first. The Board determined that the Twelfth Amendment referenced in Item 1.01 above was a qualifying "debt refinancing," and thus Mr. Gulis retired from the Board effective November 4, 2025. As previously disclosed, Mr. Gulis's decision to retire was not due to any disagreement with the Company on any matter related to the Company’s operations, policies or practices.

The Company and the Board express their deep appreciation to Mr. Gulis for his many contributions and his years of dedicated and outstanding service to the Company. The Company and the Board wish him the very best in his future endeavors.

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:  November 5, 2025

By:

/s/ Samuel R. Hellfeld

Name:

Samuel R. Hellfeld

Title:

Executive Vice President, Chief Legal and Risk Officer

FAQ

What did Sleep Number (SNBR) change in its credit facility?

It extended maturity to December 3, 2027, reduced the revolver to $475 million (then $465 million on July 31, 2026), and adopted fixed pricing grids.

What are the new interest margin and commitment fee under the amendment?

Term SOFR margin is 4.0% through Dec 31, 2026 and 4.25% from Jan 1, 2027; the commitment fee is 0.50% through Dec 31, 2026 and 0.75% thereafter.

How do amortization payments change for Sleep Number’s term loans?

Beginning March 31, 2027, scheduled principal increases by $1,250,000 per quarter for an aggregate payment of $3,750,000 on each such date.

What covenant levels were updated in the amendment?

Maximum Net Leverage steps to 4.00x thereafter; Liquidity minimum is $30 million until Sept 30, 2026 and $40 million monthly thereafter; Interest Coverage thresholds were refreshed, and a new quarterly minimum EBITDA test begins for the quarter ending Apr 4, 2026.

Did Sleep Number keep the accordion feature?

No. The amendment terminates the accordion feature.

Is Sleep Number in compliance with its covenants after the amendment?

Yes. The company states it was in compliance with all covenants following the amendment.

What Board change was disclosed along with the refinancing?

Stephen L. Gulis, Jr. retired from the Board effective November 4, 2025, consistent with prior disclosures, and not due to any disagreement.