For the nine month period ended March 31, 2008, sales were $688.8 million compared to $704.8 million in for the same period ended March 31, 2007 for a decrease of 2.3%. Comparable store sales decreased by 6.1% for the nine month period. The decrease in comparable store sales was comprised of a 5.2% decrease in traffic and a 0.9% decrease in average ticket. For the nine month period ended March 31, 2008, net income was $17.0 million or $0.41 per diluted share compared to 2007 results of net income of $28.0 million or $0.67 per diluted share.
Kathleen Mason, President and Chief Executive Officer, stated, "We believe the results are indicative of the slump in the home furnishings sector, not a deterioration in the company's execution. The sharp drop in home prices has brought home starts and remodels to a standstill. Record high fuel prices and rising food prices, along with the drop in home values have restricted disposable income, resulting in exceptionally low consumer confidence. The flexibility of our format will enable us to continue generating positive cash flows and long term profitability."
Guidance Guidance for the fiscal year 2008 ending on June 30, 2008 is as follows: -- net sales are projected to be in the range of $895 million to $910 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 $0.38 to $0.45.
Tuesday Morning management will review third quarter fiscal 2008 financial results in a teleconference call on April 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 821 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 December 31, 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 Operations (In thousands, except per share data) Three Months Ended Mar. 31, Nine Months Ended Mar. 31, 2008 2007 2008 2007 (unaudited) (unaudited) Net Sales $178,446 $189,156 $688,789 $704,835 Cost of sales 114,447 118,288 434,177 439,318 Gross profit 63,999 70,868 254,612 265,517 Selling, general and administrative expenses 71,357 69,289 224,565 220,959 Operating income (loss) (7,358) 1,579 30,047 44,558 Other income (expense): Interest expense (455) (234) (3,561) (1,779) Interest income 2 143 155 200 Other income (expense), net 209 203 782 826 Other income (expense) (244) 112 (2,624) (753) Income (loss) before income taxes (7,602) 1,691 27,423 43,805 Income tax expense (benefit) (2,905) 644 10,429 15,768 Net income (loss) $(4,697) $ 1,047 $16,994 $28,037 Earnings Per Share: Net income (loss) per common share: Basic $(0.11) $0.03 $0.41 $0.68 Diluted $(0.11) $0.03 $0.41 $0.67 Weighted average number of common shares: Basic 41,441 41,427 41,439 41,412 Diluted 41,441 41,650 41,479 41,626 Tuesday Morning Corporation Consolidated Balance Sheets (in thousands) Mar. 31, Mar. 31, June 30, 2008 2007 2007 (unaudited) (unaudited) Assets Current assets: Cash and cash equivalents $10,270 $9,563 $10,303 Inventories 269,642 280,987 288,791 Prepaid expenses and other assets 8,392 7,508 5,954 Deferred income taxes - 3,162 1,211 Total current assets 288,304 301,220 306,259 Property and Equipment, net 78,578 85,149 83,776 Other long-term assets: Deferred financing costs 553 471 704 Other assets 3,634 3,383 3,582 Total Assets $371,069 $390,223 $394,321 Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt $2,000 $ - $26,500 Accounts payable 66,885 89,682 82,453 Accrued liabilities 30,679 32,680 31,223 Deferred income taxes 666 - - Income taxes payable - 540 712 Total current liabilities 100,230 122,902 140,888 Revolving credit facility, excl. current portion 30,000 45,500 30,000 Deferred rent 4,211 4,629 4,534 Deferred income taxes 1,790 4,648 3,459 Total Liabilities 136,231 177,679 178,881 Stockholders' equity 234,838 212,544 215,440 Total Liabilities and Stockholders' Equity $371,069 $390,223 $394,321 Consolidated Statement of Cash Flows (in thousands) Nine Months Ended Mar. 31, 2008 2007 (unaudited) Net cash flows from operating activities: Net income $16,994 $28,037 Adjustments to reconcile net income to net cash (used in) operating activities: Depreciation and amortization 13,172 12,999 Amortization of financing fees 150 128 Deferred income taxes 183 290 Loss on disposal of fixed assets 478 409 Stock compensation expense 2,663 3,444 Other non-cash charges 23 (157) Net change in operating assets and liabilities 2,440 (21,611) Net cash provided by operating activities 36,103 23,539 Net cash flows from investing activities: Capital expenditures (8,530) (11,689) Proceeds from sale of assets 78 - Net cash used in investing activities (8,452) (11,689) Net cash flows from financing activities: Borrowings -- revolving credit facility 194,500 153,000 Repayments-revolving credit facility (219,000) (128,500) Change in cash overdraft (3,185) - Payment of cash dividend - (33,144) Proceeds from exercise of common stock options and stock purchase plan purchases 1 528 Other - 63 Net cash used in financing activities (27,684) (8,053) Net decrease in cash and cash equivalents (33) 3,797 Cash and cash equivalents, beginning of period 10,303 5,766 Cash and cash equivalents, end of period $10,270 $9,563
SOURCE Tuesday Morning Corporation
Chief Financial Officer
of TUESDAY MORNING CORPORATION
of LAUREY PEAT + ASSOCIATES
for 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.|