August 28, 2007

Tuesday Morning Corporation Announces Second Quarter 2007 and Fiscal Year 2007 Results

DALLAS, Aug 28, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Tuesday Morning Corporation (Nasdaq: TUES) today reported that as previously announced, net sales for the second quarter of 2007 were $219.4 million compared to $207.7 million in 2006, an increase of $11.7 million or 5.6%. The increase is primarily due to $11.4 million increase in sales from non-comparable stores plus an increase in comparable store sales of 0.1%. The increase in comparable store sales was comprised of a 2.6% increase in average ticket and a 2.4% decline in traffic. Net income for the second quarter ended June 30, 2007 was $2.0 million or $0.05 per diluted share, compared to $2.9 million or $0.07 per diluted share last year, a decrease of $0.9 million or $0.02 per diluted share.

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

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

http://www.tuesdaymorning.com

"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.


Close window | Back to top

Copyright 2017 Tuesday Morning Corp.