DALLAS, Oct. 28, 2008 (GLOBE NEWSWIRE) -- Tuesday Morning Corporation (Nasdaq:TUES) today reported that as previously announced, net sales for the first quarter of fiscal 2009 were $173.4 million compared to $201.7 million for the quarter ended September 30, 2007, a decrease of 14.0%. Comparable store sales decreased 17.3% for the quarter. The decrease in comparable store sales was comprised of a 14.0% decrease in traffic and a 3.3% decrease in average ticket. Net loss for the first quarter ended September 30, 2008 was $4.3 million or ($0.10) per diluted share, compared to net income of $1.2 million or $0.03 per diluted share for the same period last year.
Kathleen Mason, President and Chief Executive Officer, stated, "Disposable income continues to be pressured by tight credit, food and fuel inflation, declining home values, and losses in investment accounts. Consumers are cutting back non-essential purchases. Also, Tuesday Morning stores were impacted by the effects of two hurricanes that reduced sales by approximately $4.2 million and earnings per share by approximately $.02 during the quarter. Despite these pressures, we controlled inventory and expenses to partially offset the decline in demand. We remain focused on achieving annual profits and maintaining our strong balance sheet."
Guidance for the fiscal year ending on June 30, 2009 is as follows:
* net sales are projected to be in the range of $854 million to $859 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 $0.19 to $0.21.
Tuesday Morning management will review first quarter fiscal 2009 financial results in a teleconference call on October 28, 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 851 stores in 45 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 Annual Report on Form 10-K for the fiscal year ended June 30, 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; our ability to anticipate and respond in a timely manner to changing consumer demands and preferences; and our ability to generate strong holiday season sales. 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
Sept. 30,
------------------
2008 2007
------------------
(unaudited)
Net Sales $173,401 $201,656
Cost of sales 109,245 125,947
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Gross profit 64,156 75,709
Selling, general and administrative expenses 70,910 72,544
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Operating income (loss) (6,754) 3,165
Other income (expense):
Interest expense (411) (1,686)
Interest income -- 1
Other income (expense), net 80 377
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Other income (expense) (331) (1,308)
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Income (loss) before income taxes (7,085) 1,857
Income tax expense (benefit) (2,788) 701
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Net income (loss) $ (4,297) $ 1,156
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Earnings Per Share:
Net income (loss) per common share:
Basic $ (0.10) $ 0.03
Diluted $ (0.10) $ 0.03
Weighted average number of common shares:
Basic 41,441 41,440
Diluted 41,441 41,585
Tuesday Morning Corporation (continued)
Consolidated Balance Sheets
(in thousands) Sept. 30, Sept. 30, June 30,
2008 2007 2008
---------- ---------- ----------
(unaudited) (unaudited)
Assets
Current assets:
Cash and cash equivalents $ 4,888 $ 11,918 $ 8,630
Inventories 307,081 346,017 240,996
Prepaid expenses and other assets 11,847 9,991 9,296
Income tax receivable 8,952 -- 1,996
---------- ---------- ----------
Total current assets 332,768 367,926 260,918
Property and Equipment, net 76,601 82,432 77,315
Other long-term assets:
Deferred financing costs 453 654 503
Other assets 2,519 3,679 3,040
---------- ---------- ----------
Total Assets $ 412,341 $ 454,691 $ 341,776
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Liabilities and Stockholders'
Equity
Current liabilities:
Current portion of long-term
debt $ 6,500 $ 74,000 $ --
Accounts payable 106,175 90,334 63,899
Accrued liabilities 30,821 32,555 28,595
Deferred income taxes 267 1,372 267
Income taxes payable 1,612 441 27
---------- ---------- ----------
Total current liabilities 145,375 198,702 92,788
Revolving credit facility, excl
current portion 30,000 30,000 8,500
Deferred rent 4,127 4,542 4,163
Deferred income taxes 3,414 3,582 3,414
---------- ---------- ----------
Total Liabilities 182,916 236,826 108,865
Stockholders' equity 229,425 217,865 232,911
---------- ---------- ----------
Total Liabilities and
Stockholders' Equity $ 412,341 $ 454,691 $ 341,776
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Tuesday Morning Corporation (continued)
Consolidated Statement of Cash Flows
(in thousands)
Three Months Ended
Sept. 30,
------------------
2008 2007
------------------
(unaudited)
Net cash flows used in operating activities:
Net income (loss) $ (4,297) $ 1,156
Adjustments to reconcile net income to net
cash (used in) operating activities:
Depreciation and amortization 4,212 4,442
Amortization of financing fees 50 50
Deferred income taxes -- 2,706
Loss on disposal of fixed assets 139 169
Stock compensation expense 709 1,342
Other non-cash charges (44) 66
Net change in operating assets and liabilities (25,210) (55,702)
-------- --------
Net cash used in operating activities (24,441) (45,771)
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Net cash flows from investing activities:
Capital expenditures (3,637) (3,267)
Proceeds from sale of assets -- --
-------- --------
Net cash used in investing activities (3,637) (3,267)
-------- --------
Net cash flows from financing activities:
Borrowings-revolving credit facility 63,000 82,500
Repayments-revolving credit facility (35,000) (35,000)
Change in cash overdraft (3,665) 3,157
Proceeds from exercise of common stock options
and stock purchase plan purchases 1 (4)
-------- --------
Net cash provided by financing activities 24,336 50,653
-------- --------
Net decrease in cash and cash equivalents (3,742) 1,615
Cash and cash equivalents, beginning of period 8,630 10,303
-------- --------
Cash and cash equivalents, end of period $ 4,888 $ 11,918
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