Kathleen Mason, President and Chief Executive Officer, stated, "During the first half of 2007, we capitalized on the abundance of close-out goods in the market by executing inventory buys on high-quality merchandise. The inventory selection in our stores helped deliver our comparable store sales improvement in the second quarter. We believe that market conditions will continue to be challenging as the debt and housing markets create additional obstacles for consumers. Moving into fiscal 2008, we will continue to focus on delivering positive operating cash flow and earnings per share, reducing inventory balances through profitable sales and maintaining a strong balance sheet."
For the six month fiscal year ended June 30, 2007, sales were $408.5 million compared to $395.4 million in 2006 for an increase of 3.3%. The increase in sales is primarily due to a $22.8 million increase in sales from non-comparable stores offset by a decrease in comp store sales of 2.5%. The decrease in comp store sales was comprised of a 1.5% increase in average ticket and a 3.9% decline in traffic. For the six month fiscal year ended June 30, 2007, net income was $3.1 million or $0.07 per diluted share compared to 2006 results of net income of $9.4 million or $0.23 per diluted share.
Guidance for the fiscal year 2008 (July 1, 2007 through June 30, 2008) is as follows:
-- net sales are projected to be in the range of $987 million to $997 million; -- comparable store sales are projected to be flat to positive 1.5%; and -- diluted earnings per share projected to be in the range of $0.85 to $0.90.
Tuesday Morning management will review second quarter and fiscal year 2007 financial results in a teleconference call on August 28, 2007 at 10:00 a.m. Eastern Time.
About Tuesday Morning
Tuesday Morning is the leading closeout retailer of upscale home furnishings, housewares and famous-maker gifts in the United States. The Company opened its first store in 1974 and currently operates 810 stores in 47 states during periodic "sale events." Tuesday Morning is nationally known for bringing over 8.0 million loyal customers a treasure hunt of high-end, first quality, brand name merchandise at prices 50% to 80% below department and specialty stores and catalogues.
This press release contains forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995, which are based on management's current expectations, estimates and projections. Forward-looking statements typically are identified by the use of terms such as "may," "will," "should," "expect," "anticipate," "believe," "estimate," "intend" and similar words, although some forward- looking statements are expressed differently. You should carefully consider statements that contain these words carefully because they describe our expectations, plans, strategies and goals and our beliefs concerning future business conditions, our future results of operations, our future financial positions, and our business outlook or state other "forward-looking" information.
Reference is hereby made to "Item 1A. Risk Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, 2006 for examples of risks, uncertainties and events that could cause our actual results to differ materially from the expectations expressed in our forward-looking statements. These risks, uncertainties and events also include, but are not limited to, the following: uncertainties regarding our ability to open stores in new and existing markets and operate these stores on a profitable basis; conditions affecting consumer spending; inclement weather; changes in our merchandise mix; timing and type of sales events, promotional activities and other advertising; increased or new competition; loss or departure of one or more members of our senior management, as well as experienced buying and management personnel; an increase in the cost or a disruption in the flow of our products; seasonal and quarterly fluctuations; fluctuations in our comparable store results; our ability to operate information systems and implement new technologies effectively; our ability to generate strong cash flows from our operations; our ability to maintain internal control over financial reporting; and our ability to anticipate and respond in a timely manner to changing consumer demands and preferences. The forward-looking statements made in this press release relate only to events as of the date on which the statements were made. We undertake no obligations to update our forward-looking statements to reflect events and circumstances after the date on which the statements were made or to reflect the occurrence of unanticipated events.
Tuesday Morning Corporation Consolidated Statement of Income (In thousands, except per share data) Three Months Ended Six-Months Ended June 30, June 30, 2007 2006 2007 2006 (unaudited) Net Sales $ 219,364 $ 207,669 $ 408,520 $395,428 Cost of sales 139,564 133,396 257,851 247,564 Gross profit 79,800 74,273 150,669 147,864 Selling, general and administrative expenses 75,672 69,227 144,962 132,390 Operating income 4,128 5,046 5,707 15,474 Other income (expense): Interest expense (924) (567) (1,158) (753) Interest income 2 2 146 101 Other income (expense), net 153 253 356 386 Other income (expense) (769) (312) (656) (266) Income before income taxes 3,359 4,734 5,051 15,208 Income tax expense 1,325 1,835 1,970 5,769 Net income $ 2,034 $ 2,899 $ 3,081 $ 9,439 Earnings Per Share: Net income per common share: Basic $0.05 $0.07 $0.07 $0.23 Diluted $0.05 $0.07 $0.07 $0.23 Weighted average number of common shares: Basic 41,440 41,384 41,433 41,380 Diluted 41,625 41,626 41,637 41,647 Tuesday Morning Corporation (continued) Consolidated Balance Sheets (in thousands) June 30, Dec 31, 2007 2006 2006 Assets (unaudited) Current assets: Cash and cash equivalents $10,303 $5,766 $49,633 Inventories 288,791 241,660 242,674 Prepaid expenses and other assets 5,954 7,413 5,617 Deferred income taxes 1,211 5,071 3,162 Total current assets 306,259 259,910 301,086 Property and Equipment, net 83,776 86,868 86,397 Other long-term assets: Deferred financing costs 704 599 514 Other assets 3,582 4,930 5,137 Total Assets $394,321 $352,307 $393,134 Liabilities and Stockholders' Equity Current liabilities: Current portion of long term debt $ 26,500 $ - $ - Accounts payable 82,453 72,302 88,514 Accrued liabilities 31,223 29,444 35,934 Income taxes payable 712 4,736 15,543 Total current liabilities 140,888 106,482 139,991 Revolving credit facility, excl. current portion 30,000 21,000 - Deferred rent 4,534 4,553 4,618 Deferred income taxes 3,459 6,267 4,648 Total Liabilities 178,881 138,302 149,257 Stockholders' equity 215,440 214,005 243,877 Total Liabilities and Stockholders' Equity $394,321 $352,307 $393,134 Consolidated Statement of Cash Flows (in thousands) Six-Months Ended June 30, 2007 2006 (unaudited) Net cash flows from operating activities: Net income $3,081 $9,439 Adjustments to reconcile net income to net cash (used in) operating activities: Depreciation and amortization 8,858 8,102 Amortization of financing fees 93 86 Amortization of restricted stock compensation expense 49 - Stock compensation expense 1,962 1,601 Other non-cash charges 948 70 Net change in operating assets and liabilities (70,749) (37,778) Net cash used in operating activities (55,758) (18,480) Net cash flows from investing activities: Capital expenditures (6,655) (7,184) Other - - Net cash used in investing activities (6,655) (7,184) Net cash flows from financing activities: Net borrowings-revolving credit facility 56,500 21,000 Payment of cash dividend (33,144) (33,102) Other (273) (15) Net cash provided by (used in) financing act. 23,083 (12,117) Net decrease in cash and cash equivalents (39,330) (37,781) Cash and cash equivalents, beginning of period 49,633 43,547 Cash and cash equivalents, end of period $10,303 $5,766
SOURCE Tuesday Morning Corporation
|"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Tuesday Morning Corporation's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.|