Kathleen Mason, President and Chief Executive Officer, stated, "Record increases in energy and food prices, coupled with the prolonged housing and credit crisis, sharply restricted our customers' disposable income during the quarter. Despite these pressures, we were able to control inventory and expenses to partially offset the decline in demand. We continue to compete with liquidation sales in a struggling home furnishings sector, but remain focused on achieving annual profits and maintaining our strong balance sheet."
For the fiscal year ended June 30, 2008, sales were $885.3 million compared to $924.2 million for the same period ended June 30, 2007, a decrease of 4.2%. Comparable store sales decreased by 7.6% for the fiscal year. The decrease in comparable store sales was comprised of a 6.6% decrease in traffic and a 1.0% decrease in average ticket. For the fiscal year ended June 30, 2008, net income was $14.5 million or $0.35 per diluted share compared to 2007 results of net income of $30.0 million or $0.72 per diluted share.
Guidance for the fiscal year ending on June 30, 2009 is as follows:
-- net sales are projected to be in the range of $868 million to $878 million;
-- comparable store sales are projected to be in the negative mid single digits; and
-- diluted earnings per share projected to be in the range of $0.21 to $0.27.
Tuesday Morning management will review fourth quarter and fiscal year 2008 financial results in a teleconference call on August 26, 2008 at 10:00 a.m. Eastern Time.
About Tuesday Morning
Tuesday Morning is a leading closeout retailer of upscale, decorative home accessories, housewares and famous-maker gifts in the United States. The Company opened its first store in 1974 and currently operates 842 stores in 47 states. Tuesday Morning is nationally known for bringing its more than 9.0 million loyal customers a unique treasure hunt of high-end, first quality, brand name merchandise...never seconds or irregulars...at prices well below those of 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 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 Transition Report on Form 10-KT for the six month period ended June 30, 2007 and the Company's Quarterly Report on Form 10-Q for the three month period ended March 31, 2008 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 (unaudited) (In thousands, except per share data) Three Months Ended Twelve Months Ended June 30, June 30, 2008 2007 2008 2007 Net Sales $196,492 $219,364 $885,281 $924,199 Cost of sales 128,401 139,564 562,578 578,881 Gross profit 68,091 79,800 322,703 345,318 Selling, general and administrative expenses 73,288 75,672 297,852 296,632 Operating income (loss) (5,197) 4,128 24,851 48,686 Other income (expense): Interest expense (367) (924) (3,928) (2,703) Interest income 2 2 157 203 Other income (expense), net 271 153 1,052 979 Other income (expense) (94) (769) (2,719) (1,521) Income before income taxes (5,291) 3,359 22,132 47,165 Income tax expense (benefit) (2,795) 1,325 7,634 17,094 Net income (loss) $(2,496) $2,034 $14,498 $30,071 Earnings (Loss) Per Share: Net income per common share: Basic $(0.06) $0.05 $0.35 $0.73 Diluted $(0.06) $0.05 $0.35 $0.72 Weighted average number of common shares: Basic 41,441 41,440 41,439 41,433 Diluted 41,503 41,625 41,494 41,637 Consolidated Balance Sheets (unaudited) (in thousands) June 30, June 30, 2008 2007 Assets Current assets: Cash and cash equivalents $8,630 $10,303 Inventories 240,996 288,791 Prepaid expenses and other assets 11,292 5,954 Deferred income taxes - 1,211 Total current assets 260,918 306,259 Property and Equipment, net 77,315 83,776 Other long-term assets: Deferred financing costs 503 704 Other assets 3,040 3,582 Total Assets $341,776 $394,321 Liabilities and Stockholders' Equity Current liabilities: Current portion of long term debt $- $26,500 Accounts payable 63,899 82,453 Accrued liabilities 28,595 31,223 Deferred Income Taxes 267 -- Income taxes payable 27 712 Total current liabilities 92,788 140,888 Revolving credit facility, excl. current portion 8,500 30,000 Deferred rent 4,163 4,534 Deferred income taxes 3,414 3,459 Total Liabilities 108,865 178,881 Stockholders' equity 232,911 215,440 Total Liabilities and Stockholders' Equity $341,776 $394,321 Tuesday Morning Corporation (continued) Consolidated Statement of Cash Flows (unaudited) (in thousands) Twelve Months Six Months Ended June 30, Ended June 30, 2008 2007 Net cash flows from operating activities: Net income $14,498 $3,081 Adjustments to reconcile net income to net cash (used in) operating activities: Depreciation and amortization 17,483 8,858 Amortization of financing fees 201 93 Stock compensation expense 3,174 2,011 Loss on disposal of assets 540 418 Deferred income taxes 1,407 762 Other non-cash charges (1) (232) Net change in operating assets and liabilities 21,774 (70,749) Net cash provided by (used) in operating activities 59,076 (55,758) Net cash flows from investing activities: Capital expenditures (11,562) (6,655) Net cash used in investing activities (11,562) (6,655) Net cash flows from financing activities: Borrowings under the revolving credit facility 220,000 185,500 Repayments under the revolving credit facility (268,000) (129,000) Change in cash overdraft (1,187) - Payment of cash dividend - (33,145) Proceeds from exercise of common stock options and stock purchase plan purchases - 10 Payment of financing fees - (282) Net cash provided by (used in) financing act. (49,187) 23,083 Net decrease in cash and cash equivalents (1,673) (39,330) Cash and cash equivalents, beginning of period 10,303 49,633 Cash and cash equivalents, end of period $8,630 $10,303
SOURCE Tuesday Morning Corporation
/CONTACT: Stephanie Bowman, Chief Financial Officer of TUESDAY MORNING CORPORATION, +1-972-934-7251; or Laurey Peat of LAUREY PEAT + ASSOCIATES, +1-214-871-8787, for TUESDAY MORNING CORPORATION
/Web site: 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.|