For the six month period ended December 31, 2007, net sales were $510.3 million compared to $515.7 million for the same period ended December 31, 2006 for a decrease of 1.0%. Comparable store sales decreased by 5.3% for the six month period compared to the same period for the prior year. The decrease in comparable store sales was comprised of a 4.7% decrease in customer transactions and a 0.6% decrease in average ticket. For the six month period ended December 31, 2007, net income was $21.7 million or $0.52 per diluted share compared to net income of $27.0 million or $0.65 per diluted share for the same period in the prior year.
Kathleen Mason, President and Chief Executive Officer, stated, "We are aggressively responding to the pressures of the home furnishings macro environment. We believe the flexibility of our format will enable us to continue generating positive cash flows and long term profitability."
Guidance for the fiscal year 2008 ending on June 30, 2008 is as follows: -- net sales are projected to be in the range of $920 million to $940 million; -- comparable store sales are projected to be in the negative low single digits; and -- diluted earnings per share are projected to be in the range of $0.55 to $0.62.
Tuesday Morning management will review second quarter fiscal 2008 financial results in a teleconference call on January 29, 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 831 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 September 30, 2007 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 Dec. 31, Dec. 31, 2007 2006 2007 2006 (unaudited) (unaudited) Net Sales $ 308,687 $321,266 $ 510,344 $515,679 Cost of sales 193,783 199,683 319,731 321,030 Gross profit 114,904 121,583 190,613 194,649 Selling, general and administrative expenses 80,664 84,327 153,208 151,670 Operating income 34,240 37,256 37,405 42,979 Other income (expense): Interest expense (1,420) (753) (3,106) (1,545) Interest income 152 52 153 57 Other income (expense), net 195 449 572 623 Other income (expense) (1,073) (252) (2,381) (865) Income before income taxes 33,167 37,004 35,024 42,114 Income tax expense 12,633 13,177 13,334 15,124 Net income $20,534 $23,827 $21,690 $26,990 Earnings Per Share: Net income per common share: Basic $0.50 $0.58 $0.52 $0.65 Diluted $0.50 $0.57 $0.52 $0.65 Weighted average number of common shares: Basic 41,441 41,416 41,437 41,392 Diluted 41,451 41,648 41,456 41,647 Tuesday Morning Corporation (continued) Consolidated Balance Sheets (in thousands) Dec. 31, Dec. 31, June 30, 2007 2006 2007 (unaudited) (unaudited) Assets Current assets: Cash and cash equivalents $11,993 $49,633 $10,303 Inventories 259,299 242,674 288,791 Prepaid expenses and other assets 6,668 5,617 5,954 Deferred income taxes 505 3,162 1,211 Total current assets 278,465 301,086 306,259 Property and Equipment, net 80,792 86,397 83,776 Other long-term assets: Deferred financing costs 603 514 704 Other assets 3,601 5,137 3,582 Total Assets $363,461 $393,134 $394,321 Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt $- $- $26,500 Accounts payable 59,601 88,514 82,453 Accrued liabilities 36,223 35,934 31,223 Deferred income taxes - - - Income taxes payable 15,408 15,543 712 Total current liabilities 111,232 139,991 140,888 Revolving credit facility, excl. current portion 7,000 - 30,000 Deferred rent 4,390 4,618 4,534 Deferred income taxes 1,922 4,648 3,459 Total Liabilities 124,544 149,257 178,881 Stockholders' equity 238,917 243,877 215,440 Total Liabilities and Stockholders' Equity $363,461 $393,134 $ 394,321 Tuesday Morning Corporation (continued) Consolidated Statement of Cash Flows (in thousands) Six Months Ended Dec. 31, 2007 2006 (unaudited) Net cash flows from operating activities: Net income $ 21,690 $ 26,990 Adjustments to reconcile net income to net cash (used in) operating activities: Depreciation and amortization 8,854 8,636 Amortization of financing fees 101 85 Deferred income taxes (831) 290 Loss on disposal of fixed assets 236 120 Stock compensation expense 1,941 2,411 Other non-cash charges 35 (17) Net change in operating assets and liabilities 31,498 34,045 Net cash provided by operating activities 63,524 72,560 Net cash flows from investing activities: Capital expenditures (6,100) (8,285) Net cash used in investing activities (6,100) (8,285) Net cash flows from financing activities: Borrowings-revolving credit facility 118,500 107,500 Repayments-revolving credit facility (168,000) (128,500) Change in cash overdraft (6,297) - Proceeds from exercise of common stock options and stock purchase plan purchases 63 529 Other - 63 Net cash used in financing activities (55,734) (20,408) Net decrease in cash and cash equivalents 1,690 43,867 Cash and cash equivalents, beginning of period 10,303 5,766 Cash and cash equivalents, end of period $ 11,993 $ 49,633
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.|